10 October 2018
The State Council distributed a Circular on the Implementation of the Nationwide Reform of "Separation between Business Licenses and Permits" ("the Circular") on 10 October 2018. The Circular includes 4 key aspects such as direct exemption from approvals, replacement by filing management, permits in the form of notification and commitment, and optimization in services for accessing the market for implementing the first lot of 106 enterprise-related administrative approval items.
The Circular requires that all regions in the Mainland China shall file the record of the reform and publish their measures by 10 November 2018. The reform enabled enterprises to start operation instantly after obtaining the business license which helps reduce the transaction cost and time spent on starting business in the Mainland China.
The State Council recently issued the "Circular of the State Council on Promoting the Nationwide Reform of ‘Separating Operating Permits and Business Licenses' " (Guo Fa  No.35). According to the circular, separation between the operating permit and business license will be carried out on the first lot of 106 administrative approval items by four methods from 10 November 2018 onwards, including:- (1) directly cancelling the approval, (2) cancelling approval and adopting record-filing instead, (3) simplifying approval and implement notification commitment, and (4) improving measures and optimizing access services.
Four methods of reform
1. Directly cancelling the approval
Business activities can be carried out immediately after business licenses are obtained.
2. Cancelling approval and adopting record-filing instead
Relevant business activities can be carried out after submitting materials for record filing, and the relevant departments will no longer carry out the examination and approval.
3. Simplifying approval and implement notification commitment
The relevant departments shall perform their duties, develop a letter of commitment of notification and provide a sample to applicants, and inform the applicants of the approval conditions and required materials at the same time. If an applicant commits to meeting the approval conditions and submits the relevant materials, approval shall be granted on the spot.
4. Improving measures and optimizing access services
For the administrative approval items related to major public interests such as national security, public security, financial security, ecological security, and public health, the approval shall be kept and access services shall be optimized. Streamline the approval materials and publicize the approval items and procedures. Reduce the time required for approval, specify acceptance conditions and approval standards; and improve the efficiency of registration and approval.
Advancing the reforms of "separating operating permits and business licenses" and "multiple certificates into one"
Advancing the reforms of "separating operating permits and business licenses" and "multiple certificates into one".
Business license is a legal document issued to a market player by the competent registration department after confirming the qualification and general business ability of the market player according to legal conditions and procedures.
After the reform of "multiple certificates into one", the information and matters recorded in a business license will become more abundant, and market players can carry out general business activities upon obtaining their business licenses.
An operating permit is proof issued by the competent approval department to a specific market player according to the law. Such market player can engage in specific business activities upon obtaining their business license and operating permit.
After the reform of "separating operating permits and business licenses", they shall in principle, be integrated into the business license as much as possible through the reform of "multiple certificates into one".
The circular requests the formulation and improvement of supervision measures according to the classification of reform matters, clarify supervision standards, supervision methods and supervision measures. The circular also aims to speed up the improvement of the catalogue of enterprise-related information and resources collected by government departments and establish a national unified database of basic information for corporate entities.