Haworth & Lexon Law Newsletter

( Corporate and Investment )

??Haworth & Lexon Law Newsletter?? (Corporate and Investment) is issued every month, mainly introducing the legal change in the fields of corporate, investment with necessary comment. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. Haworth & Lexon Law Office has rich experience in the fields of corporate and investment. If you have any queries on the above legal matters, we are happy to provide you with our advice. Please contact Mr. Chambers Yang, the Attorney and Partner of the firm at:Tel: 8621-6887 9696 Fax: 8621-6887 8766 Email: chambers@hllawyers.com

New Provision on Verification and Approval of

Mainland Enterprises' Investment in HK and Macau

Ministry of Commerce and the HK and Macau Office of State Council of P.R.C promulgated Provision on Verification and Approval of Mainland Enterprises' Investment in HK and Macau on 31 Aug 2004. The provision became effective on the day.

The Provision stipulates that all kinds of ownership enterprises in Mainland and enterprises invested by Mainland enterprise in HK, Macau or aboard can invest enterprises in HK or Macau , however, the Provision makes no specific requirement on the registered capital and business credit for the Mainland investors.

Investors can invest in trade, engineering contract, labor service cooperation, production and manufacture, traffic and transportation, tourism, service, research and development, investment, science and technology. Except the Investment in HK and Macau for IPO indirectly or developing investment business should obtain the approval of the Ministry of Commerce, the others only have to be approved by provincial authority for commercial administrations, and the procedure should be finished in 15 days after application.

The modes of investing include newly establishment, merger and acquisition; being a shareholder by increasing the capital, share exchange, etc. The flexible modes of investment will provide convenience for the Mainland investors' capital operation overseas.

Concerning to the Foreign Exchange with the investment, according to the Provision promulgated by State Administration of Foreign Exchange in September 2003, the Provincial Bureaus of Foreign Exchange, plus Shengzheng, Dalian, Qindao, Xiamen and Ningbo now have the authority to approve USD3 million's foreign exchange in foreign investment.

??InvestHK??, the government department of HK promulgated a series of means to facilitate mainland enterprises to invest in HK on 11 Sep.