Annual Inspection Guide for Foreign Investment Enterprises

According to the Company Law of the people’s Republic of China, Regulations on Registration and Administration and Annual Inspection for Enterprises, each year, SHAIC conducts annual inspection of enterprises including FIE, during the period from 1st march to 30th June.

FIE with its local branches shall accept annual inspection form the next year of being registered in Shanghai. For example, a company registered on 31 th Dec. 2000, shall accept the first annual inspection 2001 during the period from March to June.

The way of the annual inspection of FIE in Shanghai is called joint annual inspection, which means that during specified period of inspection, SHAIC, together with other five administrative institutions (namely Shanghai Municipal Commission of Commerce, Shanghai Municipal Statistic Bureau, Shanghai Municipal financial Administration, shanghai Municipal Administration of State (Local) Taxation, State Administration of Foreign Exchange Shanghai Branch) sets a fixed venue and accepts the declaration of annual inspection materials from FIE.

The annual Inspection material of FIE includes an annual report by filling in a fix form, an annual balance sheet and profit and loss statement and duplicates of the Business license for Enterprise Legal Person, for company, it should includes audit statement.

FIE registered at State Administration for Industry and Commerce shall submit annual inspection materials to SAIC. Foreign Enterprises with contraction and management activities in Shanghai and the Shanghai branch of FIE registered in other provinces shall declare annual inspection materials directly to SHAIC in stead of taking part in the joint annual inspection.

Where a FIE misses or refuses to accept annual inspection in accordance with the provisions, the company registration authority shall impose on it a fine of not less than 10,000 yuan but not more than 100,000 yuan and order it to accept annual inspection within a specified time limit, if it continues to refuse to accept annul inspection at he expiration of the time limit, its business license shall be revoke.