China Regulatory Brief: Hospital WFOEs Permitted, Social Insurance in Jiangsu

Wholly Foreign-Owned Medical Institutions Permitted in China


China’s National Health and Family Planning Commission and the Ministry of Commerce (MOFCOM) jointly released the “Circular on Launching the Pilot Scheme of the Establishing Wholly Foreign-Owned Medical Institutions (Guo Wei Yi Han [2014] No. 244).” According to the Circular, foreign investors may now set up wholly foreign-owned medical institutions in seven cities in China including Beijing, Tianjin, Shanghai, Jiangsu, Fujian, Guangdong and Hainan. Notably, foreign investment is prohibited in Traditional Chinese Medicine (TCM) hospitals, excluding for investment derived from Hong Kong, Macau and Taiwan. Previously, wholly foreign-owned medical institutions were only allowed to be established within the Shanghai Free Trade Zone (FTZ).


Shanghai FTZ to Launch International Trading Platforms for Commodities


On August 27, the Shanghai Municipal Government issued the “Work Arrangements for Construction of the Shanghai International Trade Center 2014-2015” which announced that eight international trading platforms will be established within the Shanghai FTZ. The eight platforms, including oil and natural gas, iron ore, cotton, chemicals, silver, bulk commodities and nonferrous metal, are expected to improve the FTZ’s investment environment and promote China’s international trade system. The establishment of the eight trading platforms will be completed by 2015.


MOFCOM Simplifies Foreign-invested Real Estate Filing


The Ministry of Commerce (MOFCOM) and the State Administration of Foreign Exchange (SAFE) jointly released the “Circular on Simplifying Filing for Foreign-invested Real Estate (Shang Zi Han [2014] No. 340)” which took effect on August 1, 2014. The Circular stipulates that foreign-invested real estate enterprises shall conduct their filing with the provincial commerce authorities. MOFCOM will establish a credit system and carry out random inspections or reviews of the submitted materials.


Jiangsu Adjusts Base Figure for Social Insurance Contributions


On August 25, the Jiangsu Human Resources and Social Security (HRSS) Bureau released an update to the province’s base figure for social insurance. The base figure, which is used to calculate social insurance contributions, is derived from the average monthly wage of employees for the relevant city/province in the previous year. According to the Circular, from July 1, 2014 to June 30, 2015, the average monthly wage of employees during the previous year (i.e., the base figure) was RMB 4,832. Therefore, beginning September 1, 2014, the maximum and minimum amounts for calculating social insurance shall be RMB 14,496 and RMB 2,899 respectively.


China Releases Measures for Random Inspection of Enterprise Information


China’s State Administration for Industry and Commerce (SAIC) recently released the “Interim Measures for the Random Inspection of Enterprise Information Disclosures (SAIC Decree No. 67),” which will come into effect on October 1, 2014. According to the Measures, three to five percent of enterprises will be included in the random inspections carried out by the local SAIC. The SAIC will decide on the inspection lists through random selection of enterprise registration numbers. Inspection results will be disclosed through the credit information system.




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China Briefing hosts a wealth of business intelligence on legal, tax, and operational issues in China from a practical perspective. Knowledge, expertise and commentary for China Briefing is regularly contributed by Dezan Shira & Associates´ professional legal and tax staff. Currently located in Futian district, Dezan Shira & Associates has been assisting foreign companies in Shenzhen for 22 years.

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