Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)
Telecommunications Services
Relevant Mainland Rules and Regulations
Rules and regulations promulgated by the Mainland authorities relating to the implementation of commitments under CEPA :
Establishment of Value-added Telecommunications Enterprises- According to the "Circular on Related Issues of Hong Kong and Macao's Service Suppliers in Developing Telecommunications Business in the Mainland" (Circular of the Ministry of Industry and Information Technology No. 222 - Jun 2016) (in Chinese only), when Hong Kong service suppliers (HKSS) set up joint ventures or wholly-owned enterprises providing the following telecommunications services within the Mainland, no restriction would be imposed on the proportion of Hong Kong capital in the shareholding:
- Online data processing and transaction processing services (restricted to operating e-commerce business only);
- Multi-party communications services within the Mainland ("Domestic multi-party communications services" under the "Telecommunications Services Classification Catalogue");
- Store and forward services;
- Call centre services;
- Internet access services (restricted to provide Internet access services to end users);
- Content services (restricted to application stores only).
- According to CEPA, when Hong Kong service suppliers set up joint venture enterprises and provide the following telecommunications services within the Mainland, the proportion of Hong Kong capital in the shareholding should not exceed 50% :
- Online data processing and transaction processing services (except operating e-commerce business);
- Mainland IP based Virtual Private Network services ("Domestic IP based Virtual Private Network services" under the "Telecommunications Services Classification Catalogue");
- Internet data centre services;
- Internet access services (except for providing Internet access services to end users);
- Content services (except application stores);
- Content delivery network services;
- Code and protocol conversion services.
- According to the "Circular on Related Issues of Hong Kong and Macao's Service Suppliers in Developing Telecommunications Business in the Mainland" (Circular of the Ministry of Industry and Information Technology No. 222 - Jun 2016) (in Chinese only), HKSS shall be able to satisfy the regulations stipulated in the "Mainland and Hong Kong Closer Economic Partnership Arrangement" and its supplements.
- According to the "Administrative Provisions on Foreign-invested Telecommunications Enterprises" (2022 Revision - Mar 2022) (in Chinese only), if the foreign-funded telecommunications enterprise is engaged in the value-added telecommunications businesses of the whole country or of more than 1 province, autonomous region or municipality, it shall have a registered capital of not less than RMB 10 million. If the foreign-funded telecommunications enterprise is engaged in the value-added telecommunications businesses of 1 province, autonomous region or municipality, it shall have a registered capital of not less than RMB 1 million. Besides, the "Administrative Measures on Telecommunications Service Operation Licences" (Decree of the Ministry of Industry and Information Technology No. 42 - Jul 2017) (in Chinese only) and the "Regulations of the People's Republic of China on Telecommunications" (Feb 2016) (in Chinese only) have also listed the following requirements for enterprises operating value-added telecommunications businesses:
- The enterprise shall be a legally formed company;
- The enterprise shall have the funds and professionals suitable for its business activities;
- The enterprise shall have the reputation or capability of providing customers with long-term services;
- The enterprise shall have feasibility study reports and relevant technical submissions;
- The enterprise shall have the necessary premises and facilities;
- The enterprise shall not have committed a significant violation of law in the past 3 years.
- For other details about establishing value-added telecommunications enterprises, please refer to:
- "Administrative Measures on Telecommunications Service Operation Licences" (Decree of the Ministry of Industry and Information Technology No. 42 - Jul 2017) (in Chinese only)
- "Administrative Provisions on Foreign-invested Telecommunications Enterprises" (2022 Revision - Mar 2022) (in Chinese only)
- "Circular on Related Issues of Hong Kong and Macao's Service Suppliers in Developing Telecommunications Business in the Mainland" (Circular of the Ministry of Industry and Information Technology No. 222 - Jun 2016) (in Chinese only)
- "Administrative Measures on Internet Content Services " (Order of the State Council No. 292 - Sept 2000) (in Chinese only)
- "Notice on Handling of Value-added Telecommunications Service Operation Licences with Integrated Management Information System of the Telecommunications Business Market" (Ministry of Industry and Information Technology Circular No. 194 - May 2012) (in Chinese only)
- "Notice on Further Specifying the Market Access for Internet Data Centre Services and Internet Access Services" (Circular of the Ministry of Industry and Information Technology No. 552 - Nov 2012) (in Chinese only)
- "Circular on Lifting the Restrictions on the Foreign Equity Ratios in Online Data Processing and Transaction Processing Services (Operating E-commerce)" (Ministry of Industry and Information Technology Circular No. 196 - June 2015) (in Chinese only)
- "Circular of the Ministry of Industry and Information Technology on Strengthening the Regulation of Foreign-invested Telecommunications Enterprises during and after the Investment" (Oct 2020) (in Chinese only)
Distribution of Telephone Cards in the Mainland
- According to CEPA, HKSS are allowed to distribute in the Mainland fixed and/or mobile telephone service cards (the "Calling Cards") which can only be used in Hong Kong (excluding mobile satellite phone service cards). For details, please refer to the "Guidance Note on the Mainland and Hong Kong Closer Economic Partnership Arrangement to Allow Hong Kong Service Suppliers to Distribute Fixed / Mobile Telephone Service Cards in the Mainland" ("Guidanceā Note").
- According to the Guidance Note, HKSS selling Hong Kong telephone cards in the Mainland shall be able to meet the following requirements:
- It should be a holder of valid Carrier Licence or Services-based Operator Licence of Class 3 Services for Mobile Virtual Network Operator Services issued by the Communications Authority;
- It should have obtained a HKSS certificate issued by the Trade and Industry Department of Hong Kong;
- It should sign and submit to the Office of the Communications Authority ("OFCA") an undertaking for and on behalf of itself and its agent(s), where applicable; and
- It should notify OFCA, for and on behalf of itself and its agent(s), where applicable, before distributing the Calling Cards in the Mainland.
For other details, please refer to :
- "Circular on Deepening the Reform of 'Separating Operating Permits and Business Licenses' to Further Boost the Vitality of Market Entities for Development" (May 2021) (in Chinese only)
- "Circular of the Ministry of Industry and Information Technology on Deepening the Reform of 'Separating Operating Permits and Business Licenses'"(Jul 2021) (in Chinese only)
Enquiries concerning the relevant rules and regulations, the application procedures and requirements for the investment in telecommunications enterprises in the Mainland can be directed to:
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The Ministry of Industry and Information Technology of the People's Republic of China
(Website: http://www.miit.gov.cn/)