The “Separation of Licenses” Reform – Simpler Approval, Stronger Regulation and Better Service

As reforms of the administration and public services continue to deepen, ease of registration has increased significantly. The application process to register a business and obtain a business license for common production and business activities has become more convenient. Special few operations and industries still require special permits. This distinction between “easy-to-get licenses” and “difficult-to get permits” has become more prominent. The State Council has made the “separation of licenses” an important part of the administration and public services reform and continues to promote it.

 

The State Council has recently issued the “Notice on Deepening the Reform of ‘Separation of Licenses and Permits ‘to Further Stimulate the Development Vitality of Market Subjects” (hereafter referred to as the “Notice”). The Notice implements a nationwide management of the list of business-related licensing matters starting July 1, 2021.  The Notice also promotes reforms of the approval system for all business-related licensing matters: direct cancellation of approval, conversion of approval into filing, implementation of informed commitment and optimization of approval services. Finally, the Notice added pilot reforms in the Pilot Free Trade Zone.

 

We take some examples from the “Reformed list of business-related licensing matters (2021 national version)”:

 

Direct cancellation of approval

• Cancel the approval of foreign-invested telecom business (Basic / Class 1 Value Added / Class 2 Value Added) and review the implementation of the share ratio restriction requirement for foreign-invested telecom enterprises when processing the “telecom business license”.
• Cancel the “Registration of Advertising Publication”.

 

Conversion of approval to filing

• Cancel the management of licensed access for foreign trade operators and replace it with record management

For enterprises selling only pre-packaged food, the food business permit will be cancelled and replaced by record management; the “food business record (only selling pre-packaged food)” will be included in the scope of “multiple certificates”, and the record procedures will be handled together with the registration of enterprises.

 

Implementation of an informed commitment

• Application for Human Resources Services License/Patent Agency Practice License:

Produce and publish the format text of the notification undertaking and inform the applicant of the permit conditions and the required materials at one time. If the applicant voluntarily undertakes to comply with the permit conditions and submits the required materials, the permit decision will be made on the spot.

 

Optimizing approval services

• Foreign-invested travel agency business permit:

Realize the entire online process for application and approval; publish online the approval procedures, acceptance conditions, processing criteria, and make public the processing progress.

• Cosmetics production license:

Realize the entire online process for application and approval; no longer require applicants to provide business licenses and other materials, through interdepartmental information sharing to obtain relevant information; the approval time frame from 60 working days to 30 working days.

 

This year’s document on the deepening of the “separation of licenses” reform takes “innovation and strengthening of supervision in and after the event” as an important element of the guiding ideology, and the reform should be implemented with lenient entry and strict control, and the bottom line of supervision in and after the event should be firmly established.