Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

Distribution Services

　

CEPA I
Sectors or sub-sectors	4. Distribution services
	A. Commission agents' services          (excluding salt and tobacco)     B. Wholesale trade services          (excluding salt and tobacco)
Specific commitments	1.	To allow Hong Kong service suppliers to provide, in the form of wholly-owned operations, commission agents' services and wholesale trade services and to set up wholly-owned external trading companies in the Mainland.1
	2.	To apply for the setting up of wholesale commercial enterprises in the Mainland on a wholly-owned, equity joint venture, or contractual joint venture basis, Hong Kong service suppliers must fulfill the following conditions: The average annual sales value of a Hong Kong service supplier in the preceding 3 years is not less than US$30 million; the asset in the preceding year is not less than US$10 million; the minimum registered capital for setting up an enterprise in the Mainland is RMB 50 million. For setting up a wholesale commercial enterprise in the Central and Western Region2  , the average annual sales value of a Hong Kong service supplier in the preceding 3 years is not less than US$20 million; the minimum registered capital is RMB 30 million.
	3.	To apply for the setting up of external trading companies in the Mainland on a wholly-owned, equity joint venture or contractual joint venture basis, the Hong Kong service suppliers must fulfill the following conditions: The average annual trade value with the Mainland of a Hong Kong service supplier in the preceding 3 years is not less than US$10 million; for setting up an external trading company in the Central and Western Region, the average annual trade value with the Mainland of a Hong Kong service supplier in the preceding 3 years is not less than US$5 million; the minimum registered capital for setting up a company in the Mainland is RMB 20 million; for setting up an external trading company in the Central and Western Region, the minimum registered capital is RMB 10 million.
	4.	There are no geographic restrictions for Hong Kong service suppliers to provide, in the form of wholly-owned operations, commission agents’ services and wholesale trade services in the Mainland.
Sectors or sub-sectors	4. Distribution services
	C. Retailing services  (excluding tobacco)
Specific commitments	1.	To allow Hong Kong service suppliers to set up wholly-owned retail commercial enterprises in the Mainland.3
	2.	To apply for the setting up of retail commercial enterprises in the Mainland on a wholly-owned, equity joint venture or contractual joint venture basis, Hong Kong service suppliers must fulfill the following conditions: The average annual sales value of a Hong Kong service supplier in the preceding 3 years is not less than US$100 million; the minimum asset in the previous year is US$10 million; the minimum registered capital for setting up an enterprise in the Mainland is RMB 10 million. For setting up a retail commercial enterprise in the Central and Western Region, the minimum registered capital is RMB 6 million.
	3.	To allow Hong Kong service suppliers to set up retailing enterprises in all cities at the prefectural level in the Mainland, and cities at the county level in Guangdong Province.
	4.	To allow Hong Kong service suppliers to set up wholly owned retailing enterprises in the Mainland for sale of motor vehicles4 .
	5.	To allow Hong Kong permanent residents with Chinese citizenship to set up, in accordance with the relevant laws,  regulations and administrative regulations, individually owned stores in Guangdong to provide retailing services excluding franchising operation, without being subject to the approval procedures applicable to foreign investments. The sales area of such stores should not exceed 300 square metres.

¹ The wholesale trade services and commission agents' services provided by Hong Kong service suppliers in the Mainland in respect of books, newspapers, magazines, pharmaceutical products, pesticides, mulching film, chemical fertilizers, processed oil and crude oil remain subject to Mainland's commitments to members of the World Trade Organization.

²In this Annex, the Central and Western Region include Central Region and Western Region. Western Region refers to 12 provinces/autonomous regions/municipality including Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Inner Mongolia and Guangxi; and Xianxi Tugia-Miao Autonomous Prefecture of Hunan Province, Enshi Tugia-Miao Autonomous Prefecture of Hubei Province and Yanbian Korean Autonomous Prefecture of Jilin Province. Central Region refers to 8 provinces including Heilongjiang, Jilin, Shanxi, Henan, Hubei, Hunan, Anhui and Jiangxi.

³ The retailing services provided by Hong Kong service suppliers in the Mainland in respect of books, newspapers, magazines, pharmaceuticals, pesticides, mulching film, chemical fertilizers, staple food, vegetable oil, edible sugar, cotton and processed oil remain subject to Mainland's commitments to members of the World Trade Organization.

⁴ Chain stores with more than 30 outlets remain subject to Mainland's commitments to members of the World Trade Organization.

⁶ Chain stores with more than 30 outlets remain subject to Mainland's commitments to members of the World Trade Organization. The retailing services provided by Hong Kong service suppliers in the Mainland in respect of chemical fertilizers, staple food, vegetable oil, edible sugar and cotton remain subject to Mainland's commitments to members of the World Trade Organization.

⁷ Chain stores with more than 30 outlets remain subject to Mainland's commitments to members of the World Trade Organization.

⁸ Original qualification requirements are "the average annual sales value of a Hong Kong service supplier in the preceding 3 years is not less than US$100 million; the minimum asset in the previous year is US$10 million; the minimum registered capital for setting up a motor vehicle retail commercial enterprise in the Mainland is RMB 10 million. For setting up a motor vehicle retail commercial enterprise in the Central and Western Region, the minimum registered capital is RMB 6 million."

⁹ If the commodity for sale is processed oil, Mainland's commitments to members of the World Trade Organization are still applicable. 

¹⁰ If the commodity for sale is processed oil, the Mainland's commitments to members of the World Trade Organization are still applicable.

¹¹ If the commodity for sale is processed oil, the Mainland's commitments to members of the World Trade Organization are still applicable.

¹² If the commodity for sale is processed oil, the Mainland's commitments to members of the World Trade Organization are still applicable.