In order to support the transformation of PTEs to overseas-invested enterprises, the related authorities in Dongguan have jointly released the manual Direction for Operation of Transformation of Enterprises Engaged in Processing with Supplied Materials to Overseas-Invested Enterprise on Original Premise with Continuous Production.
The manual stipulates the following:
The transformation of a PTE into an overseas-invested enterprise is based on the overseas investor’s free will.
The investor is allowed to establish a preparatory overseas-invested enterprise before the cancellation of the PTE, and co-existence of two factories on the same premise is permitted for a period of time. The Customs Administration allows the enterprise to use both old and new registration codes within a stipulated transformation period. The transformed overseas-invested enterprise may sign the processing trade contracts before cancellation of the original processing contracts. Transition of surplus materials may be handled in the name of the same enterprise during the period of transformation.
Consistency during transformation
(a) The authorities of environmental protection and production safety supervision first assess the transformation projects which have been recognized as not yet pre-approved in the transformation process.
(b) The original fire-fighting formalities remain valid for the transformed enterprise if its plant premise is unchanged.
(c) The BOFTEC and (AIC) accept the application attached with the above-mentioned documents completed.
(d) Customs-related category management and preferential treatment are still applicable to the newly established enterprise.
Transformed enterprises do not need to go through customs formalities as newly established enterprises do. Special service windows have been set up by functional departments to offer timely service to handle the transformation procedures, and staff members from different departments are sent to a service center to jointly provide “one-stop” service for business licenses.