A wide-open window for online sales

In August 19 2010, the Ministry of Commerce (Mofcom) released the Circular on Issues Relevant to the Examination, Approval and Administration of Foreign-invested Projects for Sales Effected over the Internet and by Vending Machines (关于外商投资互联网、自动售货机方式销售项目审批管理有关问题的通知) (Shang Zi Zhi [2010]272) (Circular), effective upon release. This Circular simplifies the approval procedures and telecom licensing requirements for foreign investments engaging in distributions over the Internet or through vending machines.

In response to the increasing number of internet users, Mofcom released this Circular to further expand distribution channels for foreign investments to the Internet and through vending machines. It is also part of a series of Mofcom rules to simplify administrative procedures for foreign-invested commercial enterprises and to further improve work on deploying foreign investment. Foreign investors wishing to establish an e-commerce operation in China need to study the Circular carefully and bear in mind several significant commercial, practice and legal issues before investing.