China to Cancel MIIT Approval for Foreign Investment in Telecom Services

China to Cancel MIIT Approval for Foreign Investment in Telecom Services

The State Council of the PRC released a circular on 21 September 2020, which announced that China will cancel requirement for government review on 29 items and delegate power on 4 items.

According to the circular, the first item of government review to be cancelled is the approval for foreign investment in telecom services. In the past, foreign investors shall apply for an approval for foreign investment in telecom services from the Ministry of Industry and Information Technology of the PRC (MIIT) before they are allowed to set up a foreign invested telecom company. The cancellation of this approval will greatly simplify and shorten the process to establish a foreign-invested telecom company. It is really good news to foreign investors who are planning to set up foreign-invested telecom companies in China.

Although the above pre-approval has been cancelled, the Ministry of Industry and Information Technology of the PRC and its provincial bureaus will still review the fulfilment of the shareholding ratio restrictions for foreign-invested telecom enterprises when examining the subsequent application for telecom service license. Supervision over the daily operation of the foreign-invested telecom enterprises will be strengthened at the same time.

In the next stage, the State Council of the PRC will submit a proposal to the Standing Committee of the National People’s Congress of the PRC to amend the relevant laws and regulations in accordance with legal procedures. Kaizen will keep a close eye on the amendment of the relating laws and regulation and the release of the supporting measures.