The Notice on the Launch of Pilot Projects for Foreign-Invested Logistics Enterprises Establishment has been issued recently by the Ministry of Foreign Trade and Economic Cooperation.

The Notice permits foreign-invested logistics companies to be established in the form of a Sino-foreign equity or cooperative joint venture. Foreign investors are also allowed to engage in part or the whole of the business of international and third-party logistics.

The registered capital of foreign-invested logistics enterprises must be no less than US$ 5 million and the shares held by foreign investors may not be more than 50 percent. Sino-foreign logistics joint ventures must have a permanent operation location and the suitable facilities for operation.

The Notice limits the establishment of these joint ventures in Jiangsu, Zhejiang and Guangdong provinces, and in the cities of Beijing, Tianjin, Chongqing, Shanghai, and Shenzhen.

Subject to approval, the joint ventures may engage in the following business services, in part of in whole:(1) Imports and exports; (2) Transportation; (3) Warehousing; (4) Loading and unloading; (5) Processing; (6) Packaging; (7) Delivery; (8) Information processing; and (9) Related consultancy services, etc.

The term of operation of a foreign-invested logistics enterprise should not usually exceed 20 years bur may be extended subject to approval. These enterprises may apply to open branches in other places in China subject to relevant laws and regulations; however, the scope of business by the branches must follow that of their parent companies.

----Linus Zhu