Guangdong to streamline approval process for foreign firms

The southern province of Guangdong, an economic powerhouse in China, is expanding its Internet-based administrative approval system to nine cities in the Pearl River Delta to streamline the procedures concerning foreign-funded companies.

The system is being run as a trial in Foshan, Dongguan and Guangzhou, Wu Jun, deputy director of the provincial department of foreign trade and economic cooperation, said over the weekend.

Local media have run a series of reports on the lengthy and time-consuming process some foreign-funded enterprises had to experience in order to get registered in the province.

In one case, a foreign-invested company failed to get registered despite putting in one year's efforts.

Guangdong Party Secretary Wang Yang said the province should create an excellent business environment and keep up with advanced global practices, after some Hong Kong investors complained about the difficulties in registering and de-registering companies in the province.

The provincial department of foreign trade and economic cooperation approved 3.33 percent of the 7,035 newly registered foreign-invested companies last year and the department plans to hand its power of approval over to city-level authorities, Wu said, according to the Guangzhou-based Nanfang Daily.

The provincial administration of industry and commerce is exploring a registration service involving online application and a two-way courier service, said Zheng Yongming, deputy director of the administration.

It is also exploring a parallel approval service with the provincial development and reform commission and the provincial supervision department, Zheng said.

After four rounds of cuts between 2000 and 2009 in the number of items that require the administration's approval, the province drafted a document on reforming administrative services last year, intending to slash the number of items by a further 30 percent by 2013.

Meanwhile, in a document released last month by the State Administration for Industry and Commerce in support of Guangdong's reforms, 19 of the 32 measures were related to corporate registration, 12 of which are of a pilot nature, Zheng said.

The document is based on the principle of easier access and stricter supervision, signifying a large step forward in reform, he said.

It takes a few days to register a company in the United States through a lawyer, two days in Hong Kong through an accountant and three days in Taiwan.

In the mainland, however, it took Cheng Fengyuan, head of the association of Taiwan enterprises in Guangzhou, up to six months to register his two firms.

Cheng said the delay was because of the number of government agencies involved in the approval process and their disjointed style of work.

On the proposed reform, Harley Seyedin, chairman of the American Chamber of Commerce in South China, said: "We are delighted to see this undertaking to find ways of reducing the heavy burden that is now delaying or preventing investments by our companies.

"Our 2012 Special Report on the State of Business in South China shows an increasing number of American small and medium-sized businesses entering China. Since the vast majority of new innovation and technology in the US is developed and owned by SMEs, it is imperative for China to streamline the regulatory process to enable more SMEs entry into China," he added.