China to Shorten Business Registration and Construction Project Approval Processes

By I-Ting Shelly Lin

On May 2, China’s State Council announced plans to shorten the business registration process for newly-established companies from 20 days to 8.5 days and to reduce the approval time for construction projects from 200+ days to 120 days.

Expedited business registration will first be implemented in municipalities directly under the central government (Beijing, Chongqing, Tianjin, and Shanghai), planned cities, sub-provincial cities, and provincial capitals this year. These regions include Dalian, Guangzhou, Hangzhou, Qingdao, Ningbo, Xiamen, and Shenzhen, among many others.

The government aims to have all cities in China reach this goal in the first half of 2019.

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The measures to shorten the business registration process include:

• Allowing companies to submit electronic applications;
• Removing the requirement for company names to pass prior approval, unless there are special requirements;
• Allowing companies to choose the production units to make official chops; and
• Reducing the processing time for invoice application and registration.

Meanwhile, the plans to accelerate the approval process for construction projects will first be introduced in 16 pilot regions: Beijing, Shanghai, Nanjing, Guangzhou, Shenzhen, Weinan, Taijin, Chongqing, Shenyang, Dalian, Xiamen, Wuhan, Chengdu, Guiyang, Yan’an, and Zhejiang. As with the business registration measures, the government aims to have national implementation by the first half of 2019.

To cut the approval time for construction projects, the government announced three main initiatives:

• Simplifying the process for examination and approval, including by canceling the need to record construction contracts and building efficiency design reviews, and streamlining the process for environmental impact assessments and other assessments;
• Implementing categorized management, including by simplifying the approval procedures for small and medium-sized construction projects and allowing construction units to decide their own process for contract awarding; and
• Streamlining registration stages, including by using “one system, one window” to provide integrated services.

Additionally, the government announced that it will build a unified national construction approval and management system by 2020.

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The moves to shorten the business registration and construction project approval processes are part of a wider government campaign to cut bureaucratic red tape, eliminate government overlap and inefficiencies, and improve ease of doing business in the county.

Several regional governments in China, such as the Beijing municipal government, have undertaken efforts to improve the business environment at the local level.

In its most recent rankings, the World Bank ranked China 78 out of 190 economies for ease of doing business, sandwiched between the Kyrgyzstan at 77 and Panama at 79.

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