I). Authority Power Limits in Examination and Approval

In accordance with the regulations concerning the authorities and their limits in examining and approving the applications for establishment of the enterprises with foreign investment promulgated by the State Council and the provincial government, foreign-funded enterprises shall be examined and approved by different-level authorities according to their scale and line of business.

a.    Foreign funded projects examined and approved by Ministry of Commerce

1) Projects of the encouraged category and the permitted category in the Guideline of Industries for Foreign Investment with the total investment (including increased investment) not less than 100 million U.S. dollars as well as the projects in limited category with total investment not less than 50 million U.S. dollars.

2) Projects shall be examined and approved by Ministry of Commerce based on state related laws and regulations (such as foreign invested shareholding company, investment company and medical institutions etc).

3) Projects involve in import and export quota and license.

b. Foreign funded projects examined and approved by Provincial Department of Commerce

1) Projects of the encouraged category and the permitted category in the Guideline of Industries for Foreign Investment with the total investment (including increased investment) not more than 100 million U.S. dollars but over USD 30 million (including USD 30 million) as well as the projects in limited category with total investment not more than 50 million U.S. dollars (excluding USD 50 million).

2) Projects shall be examined and approved by Provincial Department of Commerce based on state related laws and regulations or within the power limits authorized (entrusted) by Ministry of Commerce(such as international forwarding enterprise for mail express, partial commercial sectors for foreign investment).

c. Foreign funded projects examined and approved by municipality and prefecture commerce department, the administration committees of Changsha Hi-tech Industrial Development Zone, Changsha Economic and Technical Development Zone and Zhuzhou Hi-tech Industrial Development Zone

Projects of the encouraged category and the permitted category in the Guideline of Industries for Foreign Investment with the total investment not more than USD 30 million (excluding USD 30 million).

The Administration Committee of Changsha Economic and Technical Development Zone may examine and approve the projects authorized by Ministry of Commerce (such as international forwarding enterprise for mail express, partial commercial sectors for foreign investment).

Ⅱ) Registered Capital and Total Investment

The proportion of the registered capital to the total investment shall be as follows:

The proportions of the registered capital to the total investment stipulated above shall be applicable to all equity or contractual joint ventures and wholly foreign-owned enterprise. Exceptions shall be made only upon approval by the Ministry of Commerce together with the State General Administration for Industry and Commerce.

Ⅲ) Forms of Capital Contribution

1. Convertible foreign currencies;

2. Foreign investors' profits in RMB from the equity/contractual joint venture or from the wholly foreign funded enterprise in China;

3. Equipment and machinery, raw materials and other goods and materials;

4. Land which has been granted the legitimate right to use and developed in accordance with the regulations for the development and operation of the whole areas of land by foreign investors, and attachments and buildings belonging to it;

5. Industrial property rights and proprietary technology