State Council calls for decoupling business licenses from operation permits in pilot FTZs

The State Council released a notice recently to fully decouple business licenses from operation permits in the pilot free trade zones nationwide and usher in a list-based administrative mode to regulate government approval items relating to business operations, in a bid to help enterprises start business with high efficiency.

The State Council asked departments concerned to constantly streamline administration and delegate powers, clarify duties of the government and enterprises, sort out government approval items relating to business operations, improve transparent rules for market entry, grant enterprises more autonomy in business operations, and step up regulation and oversight, in an effort to create a world-class and market-oriented business environment, boost micro market entities' vitality, and propel high-quality economic development.

The reform list-based administrative mode will be piloted in FTZs in provincial regions including Shanghai, Guangdong, Tianjin, Fujian, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan, Shaanxi, Hainan, Shandong, Jiangsu, Guangxi, Hebei, Yunan, and Heilongjiang.

Operation permits will cover all government approval items relating to business operations with a list-based administrative mode introduced. The list should be regularly adjusted and disclosed to the public to maintain complete transparency. Items unlisted should not be used to deny or restrict enterprises' access to related industries. And enterprises with business licenses should be able to launch business with full autonomy.

Reform will be carried out in multiple ways, such as canceling, approval converging into record-filling management, pre-commitment of compliance, and optimizing approval services.

When it comes to approval items that can be efficiently adjusted by market mechanism and autonomously regulated by industries or intermediate agencies, they should be rendered obsolete and canceled. For items that should be kept valid, enterprises can pledge the fulfillment of their operation in accordance to corresponding permitting requirements, and departments concerned can engage supervision during and after business operations.

Additionally, items regarding national security, public security, financial security, and alike call for optimization in approval services.

According to the notice, the reform calls for improvement in related policies. The scope of business registration should be well linked with business license application. Market regulators should notify enterprises with the approval items relating to business operation in accordance with their business scopes. Regulators should also present the information of permit applicants to administrators concerned via a national administrative information sharing platform; the latter should issue permits in a timely manner and inform market regulators the results.

Further efforts should be made to constantly improve the quality and efficiency in approval services. Internet plus government services should work in full sail to streamline the whole process of business permit application.

Departments concerned should engage an overall implementation of interdepartmental oversight conducted through the random selection of both inspectors and inspection targets and the prompt release of results. Cutting-edge technologies, emerging industries, new forms and models of business are privileged with inclusive and prudent supervision, and high-risk industries and fields are key regulatory targets.

The State Council' coordination group for promoting government function transformation and advancing reforms to streamline administration and improve services helms the work of decoupling business licenses from operation permits to be fully implemented in pilot FTZs.

The Ministry of Commerce will be in charge of dovetailing the decoupling work and the opening-up policies.

Local provincial governments, where the FTZs are situated in, should take chief charge of their respective decoupling work, appoint leading departments, improve work mechanism, strengthen division of responsibilities, and strongly push forward the reform. The local authorities are also required to prepare implementation plans, which should be made public before Nov 30 and submitted to the State Council.