Wholly Foreign-owned Shipping Companies to See Relaxed Market Access

China will moderately relax market access conditions for wholly foreign-owned shipping companies, allowing them to touch a wider scope of business in the country.

According to the “Circular on Strengthening the Administration of Approval for Wholly Foreign-owned Shipping Companies (jiaoshuifa [2011] No.440)“ released by the Chinese Ministry of Transport (MoT) on August 15, the relaxed policy covers the following aspects:

• A foreign shipping company is allowed to directly establish a wholly foreign-owned shipping company in China upon its actual needs, without first establishing a representative office
• A foreign shipping company is allowed to establish a wholly foreign-owned shipping company in an opened-up coastal city where the company has stable goods supply or passengers
• One year after a wholly foreign-owned shipping company fully pays up its registered capital and starts its business operation, it may establish a branch in any other opened-up coastal city where it has stable goods supply or passengers
• An approved wholly foreign-owned shipping company or any branch thereof is allowed to provide services – such as seeking potential shipping deals or passengers, issuing bills of lading, issuing passenger tickets, settling transport fees and signing service contracts – to ships owned or operated by the parent company

Before going through the regular registration procedures for the Chinese establishment of a wholly foreign-owned shipping company at the provincial commercial departments, a foreign shipping company shall first submit an application to the MoT to obtain its approval. Any other issues related to the establishment of a wholly foreign-owned shipping company shall proceed according to the “Interim Measures for the Administration of Approval for Wholly Foreign-owned Shipping Companies (MoT Decree [2000] No.1).”

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