Memorandum by Mr. J. Bartlett Richards, of the Office of Far Eastern Affairs 13
Registration is under the charge of the Department of Commerce, a division of the Ministry of Economic Affairs, of which Dr. K. K. Ma is Director. Actual registration in Chungking is with the Bureau of Social Affairs of Chungking Municipality under Mr. Pao.14 Outside Chungking, it is with the provincial authorities.
It was originally announced that foreign companies would have to register by September 30, 1943. Representatives of American companies protested that they had neither the authority nor the information needed to register and were granted an indefinite extension on application in writing to the Bureau of Social Affairs, accompanied by a letter from the Consular officer attached to the Embassy, stating that our information indicated that they were incorporated under American laws.
In the spring of 1944, I discussed the matter with Dr. Wong Wen-hao, Minister of Economic Affairs, who said that it would not be necessary for foreign companies to register, pending revision of the regulations. Apparently he was misinformed, as Dr. Ma insisted that registration was required and when I saw Dr. Wong a little later, he acquiesced in that point of view. Mr. Pao was instructed by the Ministry to set a deadline for registration of foreign companies and he fixed July 30, 1944 as the date. Both he and Dr. Ma assured me, however, that extensions would be granted on application.
Dr. Wong commented that there was no provision in Chinese law under which foreign companies could incorporate. Dr. Ma disagreed and said that there was nothing in Chinese law to prevent the incorporation of foreign-owned companies. I referred to the CEC15 resolution of September 1943, which urged that foreign companies be permitted to make direct investments in China, and asked whether that was intended merely to express approval of an existing situation. After looking up the resolution, Dr. Ma said that that was apparently the case, as there is nothing at present to prevent foreign companies from making direct investments in China.
The day before I left Chungking, at a dinner, Dr. Ma asked me what registration requirements were causing difficulty to American companies. I referred among other things to the requirement of a list of shareholders. He said that was not required of branches of companies registered abroad; that the requirements were simple, including [Page 990]a copy of the charter, the addresses of the head office and the branch in China, the amount of capital allocated to the branch in China and a few other things he couldn’t recall offhand. He said there was a statement of the requirements for registration of branch offices of foreign companies, in the Regulations for the Registration of Companies. He said that a company which was doing little or no business could register with a nominal amount of capital at the present time and register an increase of capital at any time in the future.
I cannot find, in the Regulations for the Registration of Companies (promulgated June 30, 1931), any statement of special requirements for the registration of branch offices of foreign companies. Article 43 states, however, that “where a company whose head office is not in China establishes its first office in the territory of China, the statements set forth in its letter of application must be certified by the local consul of the nationality of the company. Also, the articles of association of the company must be appended.” There is nothing to show what statements should be set forth in the letter of application. Since the articles of association are asked for separately, it would seem that the reference is not to the details listed in Article 29 of the Regulations, which include the articles of association. It would be desirable to obtain from the Ministry of Economic Affairs an explicit statement of the details required in the registration of a branch office in China of a company incorporated in another country.