By Wang Rui and Xiao Yu King & Wood Mallesons’ M&A Group
In 2014, the Ministry of Industry and Information Technology (“MIIT”) and Shanghai Municipal Government issued a series of regulations in relation to opening up value-added telecommunication services to foreign investments within the Shanghai Free Trade Zone. According to these regulations, the restrictions on foreign investments in seven categories of value-added telecommunication services, which were listed under the current Classification Catalogue of Telecommunication Services (“Classification Catalogue of Telecommunication Services (2003)”), have been relaxed to different degrees. Among which, the percentage cap on foreign equity ownership of companies providing “Online Data Processing and Transaction Processing Services (Operating E-commerce)” has been lifted from 50% to 55%. Meanwhile, the approval and establishment process for foreign invested telecommunication enterprises have been substantially simplified in the Shanghai Free Trade Zone, and such enterprises are permitted to provide relevant value-added telecommunication services on a nationwide basis.
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