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China

The Measures for the Administration of Foreign-Invested Distribution Enterprises for Books, Newspapers and Periodicals was promulgated by the State Press and Publication Administration and the Ministry of Foreign Trade and Economic Cooperation (now Ministry of Commerce) on March 17 2003. The Measures will take effect on May 1 2003 while those regulations regarding foreign-invested wholesale enterprises contained therein will come into effect on December 1 2004.

Under the Measures foreign-invested enterprises in the business of distribution of books, newspapers and periodicals will be able to take the form of equity joint ventures, contractual joint ventures, wholly-owned enterprises, or through equity participation in or merger and acquisition of domestic enterprises.

The Measures set out requirements on application procedures, registered capital and business scope of those foreign-invested distributors. Both the press and publication administrative authorities and foreign trade and economic cooperation authorities must approve the establishment of such distributors. A legally incorporated foreign-invested distributor must obtain the following three licences: a licence for publication operations, an approval certificate for foreign-invested enterprises, and a business licence. The minimum registered capital is Rmb5 million ($605,000) for a retailing enterprise and Rmb30 million for a wholesale enterprise. The operation term is limited to 30 years.

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