I expect to have a personal interview with Dr. Wong Wen-hao, the Minister of
Economic Affairs, in regard to this matter within the next few days, and
will report further to the Department on the subject immediately thereafter.
In order, however, that the information given by the Ministry in reply to
the National Foreign Trade Council memorandum may be available as promptly
as possible in Washington, I hasten to send the copies of the Minister’s
letter and memorandum by the first available means.
[Enclosure—Translation]
The Chinese Minister of Economic Affairs
(Wong) to the American Ambassador (Gauss)
Chungking, June 23,
1944.
My Dear Mr. Ambassador: I have the honor to
acknowledge the receipt of Your Excellency’s letter of May 30,19
enclosing a memorandum covering questions raised by the National Foreign
Trade Council in connection with the Regulations Governing the
Registration of Companies.
With regard to the registration of companies, the procedure provided for
in the existing Chinese laws and regulations is very simple and
practical. Chinese businessmen have encountered no difficulties in the
observance of such laws and regulations and foreign merchants who have
established companies or branches in China have experienced no
inconvenience in applying for registration under such laws and
regulations. In view of the absence of any difficulties in the
application of the laws and regulations governing the registration of
companies, the Chinese Government does not at the present contemplate
revising the same. Appropriate consideration will, however, be given to
any suggestions which may be proffered by either Chinese or foreign
businessmen for the improvement of the procedure of registration at such
a time in the future when revisions are contemplated.
The registration of companies is for the purpose of determining the
qualifications of a juristic person and of protecting his legitimate
interests. In order to acquire legal protection, it is advisable that
those who establish companies or branches within China, no matter
whether they be Chinese or foreign businessmen, should comply with the
procedure of registration. The registration of foreign firms may be
divided into the following two categories:
1. If the head office of a company (that is the domicile of the juristic
person) is located within China, irrespective of the nationality of
[Page 993]
its organizers, its
organization, its rights and obligations vis-à-vis others, as well as
the procedures of establishment and regiChiang Kai-shesktration, it
shall be governed by the existing Chinese laws and regulations relating
to companies in the same manner as those organized by Chinese
businessmen.
2. As the head office of a company, which is located outside of China but
which establishes branches within China and registers those branches
under its own name, derives its qualifications as a juristic person from
the law of its domicile, the internal organization of such company as
well as its rights and obligations with respect to others shall
naturally be governed by the law of the place where the head office is
located. Its branches which are established in China and the officers in
charge of such branches must, however, register with the Chinese
Government, and the business of such branches shall be governed by
Chinese law.
The procedure for the registration of such branches is exceptionally
simple and is clearly provided for in Article 28 of the Law for the
Enforcement of the Company Law and Articles 13, 14, 15, 42 and 43 of the
Regulations Governing the Registration of Companies. With the exception
of the general provisions, none of the other articles of the Company
Law, the Law for the Enforcement of the Company Law or the Regulations
Governing the Registration of Companies is applicable to branches of the
nature mentioned above.
Registers of shareholders, mentioned in Your Excellency’s letter under
reference, need not be submitted in the case of such branches.
With regard to companies whose head offices are established in foreign
countries and who wish to register the said head offices with the
Chinese Government, there is as yet no precedent for such procedures;
moreover, such registrations do not fall within the scope of the
provisions for registration.
The principal laws and regulations promulgated by the Chinese Government
relating to the registration of companies are the Company Law, the Law
for the Enforcement of the Company Law and the Regulations Governing the
Registration of Companies. The Company Law is a substantive law while
the Law for the Enforcement of the Company Law is a procedural law. All
those who establish companies in Chinese territory, both Chinese and
foreign businessmen alike, shall uniformly abide by the Regulations
Governing the Registration of Companies as an accessory regulation. The
provisions which concretely and directly apply to branches of foreign
firms are the five articles cited above.
With regard to the questions raised by the National Foreign Trade Council
in connection with the regulations, the Council’s lack of understanding
of the scope of the application of the regulations has caused many
misinterpretations. I have the honor to enclose, for Your Excellency’s
information and for transmission, a memorandum20 explaining the various
questions raised by the Council.
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I may add that, while Your Excellency’s inquiry was made in a personal
form, since the matter concerns the interpretation of laws I have
replied in the Chinese language with the request that Your Excellency
take note in the premises.
