1.1 First of all, foreign companies (outside the mainland China, including Hong Kong and Macao) should set up a foreign owned enterprise (“the company”) in mainland China in the form of Sino-foreign joint venture or Sino-foreign co-production or WFOE.

 

1.2 Application can be submitted to competent department of commerce of the State Council through local commerce departments of province, autonomous region or municipality after the company is established. If the company is located in a city specifically designated in the state plan which has the provincial economical right then application can be submitted through the city’s commerce departments.

 

1.3 Relevant departments should submit the application documents and materials to commerce department of the State Council within 7 days from the day of receiving these documents.

 

1.4 The State Council should decide whether to approve or not within 90 days from the day of receiving all the documents and materials and referring to administrative department of industry and commerce of the State Council for opinions. The administrative department of industry and commerce of the State Council will issue a direct selling license upon approval.

 

1.5 The company may go to the administrative department of industry and commerce for alteration registration with the direct selling license.

 

2.1 Stockholders of the company have good business reputation and with no record of severe illegal business during the 5 passed years before application.

 

2.2 The company’s actually paid registered capital should no less than 800,000,000RMB.

 

2.3 200,000,000RMB of margin should be deposited in appointed banks by the company and submit the specific margin account voucher (issued by banks) at the same of application.

 

3.1 Certification documents of upper requirements.

 

3.2 Article of associate. Joint venture or cooperation contract is also needed in cases of Sino-foreign joint venture or Sino-foreign co-production.

 

3.3 Marketing plan report, including the people’s government (above the country level) recognized scheme of services network in the area which direct selling activities will be held.

 

3.4 Product introduction (must be in accordance with national standard).

 

3.5 Sample of promotion contract with promoters.

 

3.6 Capital verification report issued by public accounting firm. 

 

3.7 Agreement between the company and appointed bank on the use of margin in accordance with the < Regulation on Direct Selling

Administration >

 

3.8 Foreign stockholders of the company should submit: certification of company registration outside mainland China, certification of legal representative (appointed by the board of directors or shareholders to act on behalf of the company), balance sheets and profit and loss accounts over the past three years audited by a certified accountant or an accounting firm and declaration of more than 3 years experience of direct selling in foreign countries. Notarization of these certifications issued by foreign stockholders` own countries` notarization department (with Chinese version)

 

3.9 Scheme of services network undertaking direct selling in approved area. Commerce department (above country level) where services network are located should inspect these network and issued a written approval if the scheme is approved. Provincial commerce department should provide this approval when submitting the application documents to commerce department of the State Council.