Ministry of Finance, State Administration for Industry and Commerce, Ministry of Commerce, State Administration of Foreign Exchange and China Securities Regulatory Commission, Plan for the Localisation and Change of Form of Sino-foreign Cooperative Joint Venture Accounting Firms

Issued: May 2 2012
Interpreting authorities: Ministry of Finance, together with relevant ministries and commissions of the State Council (Article 29).

Applicability: For the purposes of this Plan, the term “Sino-foreign cooperative joint venture accounting firm” means an accounting firm cooperatively established in China by a foreign accounting firm and a domestic accounting firm with the approval of the Ministry of Finance, and includes Ernst & Young Hua Ming, KPMG Huazhen, Deloitte Touche Tohmatsu Certified Public Accountants Ltd. and PricewaterhouseCoopers Zhong Tian CPAs Limited Company (Article 2).

For the purposes of this Plan, the term “localisation and change of form” means that a Sino-foreign cooperative joint venture accounting firm shall realise localisation as per its undertakings at the time of its establishment and adopt an organisational form that satisfies Chinese laws and regulations once its term of cooperation expires or, of its own free will, before the expiration of its term of cooperation.

Main contents: Regardless of the voting method adopted by an accounting firm for material business and management decisions, the total voting rights of all the partners who are not China-certified public accountants may not exceed 40% from the date of approval of establishment; and by December 31 2017 the aforementioned total voting rights may not exceed 20% (Article 10).

The person serving as the senior partner (or in another position that performs the highest management duties) of a limited liability partnership accounting firm shall satisfy the following conditions:

(1) having Chinese citizenship; and

(2) having China-certified public accountant practice qualifications (Article 11).