The Yunnan Provincial People's Government recently issued the Plan for Pilot Reform of Separating Operating Permits from Business Licenses in the China (Yunnan) Pilot Free Trade Zone (hereinafter referred to as the Plan). According to the Plan, from December 1st, the reform would be launched in the Kunming, Honghe and Dehong areas of the China (Yunnan) pilot free trade zone(FTZ) to separate operating permits from business licenses. This involves 331 enterprise-related business licensing procedures.

According to the Plan, the province will immediately cancel enterprise-related business licensing procedures that are no longer necessary and adjustable through the market mechanism, can be regulated by the industry organizations or intermediaries, and standardised through oversight of the whole business operations process. After cancellation of these procedures, enterprises can start operations, provided that they have obtained business licenses.

For the six procedures concerning examination and approval that are to be replaced by filing processes, the procedures will be handled at the time of registration. This means that the different forms of certification required of businesses can be merged into one certificate.

53 procedures concern examination and approval carried out by the way of notification and commitment. These include human resources service permits, road freight operation permits and travel agency establishment permits. The authorities concerned shall formulate an accurate and complete list of conditions that are quantifiable, operable and not subjected to fallback provisions. The enterprises shall be notified of the regulations, the consequences of violating the commitments, and be provided with a sample letter of notification and commitment.

265 examination and approval services procedures shall be optimised. These include procedures for the pollutant discharge permit, the motor vehicle driver training permit and the advertising release registration. This will result in a reduction of the time needed for examination and approval, improved efficiency and lower costs.           

Operating permits and business licenses are the two keys for a company to enter the Chinese market. In the past, a company hoping to enter the Chinese market should first obtain the operating permit and then apply for the business license. Even with a business license, it still faced a myriad of requirements for other types of permits. The reform to separate the operating permits and business licenses aims to solve this problem by simplifying the administrative procedures of examination and approval, thus improving the business environment.