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Chapter VI Service Guarantees

Article 47 [Original Text]

Article 47. People's governments at all levels and their relevant departments shall formulate policies to encourage entrepreneurial ventures by private economic organisations, provide public services, and promote employment through entrepreneurship.

[Interpretation]

Legislative Background and Purpose: Entrepreneurship is the wellspring of economic vitality and a vital pathway for expanding employment. The private sector constitutes the main force in entrepreneurship. This article emphasises the government's responsibility in supporting entrepreneurship and driving employment through such ventures.

Interpretation of the Provision:

a. ‘Formulate policies to encourage entrepreneurship among private economic organisations’: Requires the government to introduce targeted policy measures to lower barriers to entrepreneurship and optimise the entrepreneurial environment. Such policies may include: start-up subsidies, tax and fee reductions, financing support, entrepreneurial training, and premises support.

b. ‘Provide public services’: Offer public services to entrepreneurs in areas such as information consultation, mentoring, technical support, and market promotion.

c. ‘Encouraging entrepreneurship to drive employment’: Entrepreneurship not only fulfils the personal aspirations of founders but, more importantly, creates new job opportunities, thereby amplifying employment growth.

【Relevant Legislation】

● Employment Promotion Law of the People's Republic of China: Contains provisions encouraging entrepreneurship and supporting self-employment.

● National and local policy documents concerning mass entrepreneurship and innovation (‘Double Innovation’).

● Support policies for key groups such as university graduates, demobilised military personnel, and returning migrant workers.

【Practical Guidance】

a. Entrepreneurs leveraging policies: Individuals or teams intending to start a business should proactively understand and utilise government-provided entrepreneurial support policies and public service resources.

b. Government fostering entrepreneurial ecosystems:

● Establish entrepreneurial incubators, co-working spaces, and other entrepreneurial platforms to provide start-ups with low-cost, accessible physical spaces and supporting services.

● Establish mentor teams to offer experiential guidance to entrepreneurs.

● Organise entrepreneurship competitions, forums and similar events to stimulate entrepreneurial enthusiasm and facilitate resource connections.

● Streamline approval procedures and optimise market access conditions for start-ups.

c. Leveraging demonstration effects: Promote successful entrepreneurial cases to encourage broader participation in business creation.

d. Focusing on key groups: Pay particular attention to the entrepreneurial needs of university graduates, researchers, unemployed individuals and similar groups, providing targeted support.

Article 48 [Original Text]

Article 48. Registration authorities shall provide lawful, compliant, standardised, transparent, and efficient registration services for establishment, alteration, and deregistration to all types of economic organisations, including private economic entities, thereby reducing market entry and exit costs.

Individual industrial and commercial households may voluntarily transform into enterprises in accordance with the law. Registration authorities, tax authorities, and relevant departments shall provide guidance and facilitate the transformation of individual industrial and commercial households into enterprises.

[Interpretation of the Provision]

Legislative Background and Purpose: Efficient and effective registration services for market entities are a crucial prerequisite for stimulating market vitality. This provision aims to enhance the service standards of registration authorities, reduce the costs of market entry and exit, and encourage the transformation and upgrading of individual industrial and commercial households into enterprises.

Interpretation of Provisions:

a. Paragraph 1: Registration Service Requirements:

● ‘Registration authorities’: Primarily refers to market supervision and administration departments.

● ‘Lawful, compliant, standardised, unified, open, transparent, convenient and efficient’: Specific requirements for registration service quality.

● Lawful and compliant: Strictly processing registrations in accordance with laws and regulations.

● Standardised and unified: Implementing nationally uniform registration standards and procedures to avoid regional variations.

● Open and transparent: Public disclosure of registration matters, conditions, procedures, timeframes, fee standards, etc.

● Convenient and efficient: Streamlining procedures, reducing processing times, and promoting online processing.

● ‘Registration services for establishment, alteration, cancellation, etc.’: Covers key registration stages throughout a market entity's lifecycle.

● ‘Reducing market entry and exit costs’: This constitutes the objective of service optimisation.

b. Clause Two: Transformation of Individual Businesses (‘Individual to Enterprise’):

● ‘Individual businesses may voluntarily transform into enterprises in accordance with the law’: Grants individual businesses the right to upgrade and transform, emphasising “voluntary” and ‘lawful’ transformation. Post-transformation organisational forms may include sole proprietorships, partnerships, or companies.

● ‘Registration authorities, tax authorities and relevant departments shall provide guidance and facilitate the transformation of individual businesses into enterprises’: Requires relevant departments to offer support in areas such as registration amendments, tax transition arrangements, social security processing, trade name retention and qualification matters.

【Relevant Legislation】

● Regulations of the People's Republic of China on the Administration of Registration of Market Entities: Standardises the registration management system for all types of market entities.

● Company Law of the People's Republic of China, Partnership Enterprise Law of the People's Republic of China, Sole Proprietorship Enterprise Law of the People's Republic of China, Regulations on Individual Industrial and Commercial Households.

● Policy documents issued by the State Administration for Market Regulation and other departments concerning optimising the business environment, deepening commercial system reforms, facilitating enterprise establishment and deregistration, and promoting the transition from individual to corporate entities.

【Practical Guidance】

a. Enterprises benefiting from streamlined services:

● Private enterprises should fully utilise online processing and ‘one-stop service’ facilities provided by registration authorities when handling establishment, alteration, or deregistration procedures.

● Unreasonable demands or delays during registration may be reported to higher-level registration authorities or disciplinary inspection departments.

b. Transformation of Individual Businesses:

● Eligible and willing individual businesses may consult local market regulation and tax authorities to understand specific policies and procedures for conversion, actively pursuing transformation.

● Converting to a corporate entity enhances credit standing, standardises management, expands financing channels, and unlocks additional policy benefits.

c. Registration Authorities' Reforms:

● Continuously advance full online processing for business establishment and reduce start-up timelines.

● Simplify enterprise deregistration procedures and implement simplified deregistration.

● Establish a fast-track process for ‘individual to enterprise’ conversions, providing one-stop services.

d. Interdepartmental Coordination:

‘Individual to enterprise’ conversions involve multiple departments including market regulation, taxation, human resources and social security, and banking. Enhanced coordination is required to ensure seamless policy integration.

Article 49 [Original Text]

Article 49 Higher education institutions, research institutes, vocational schools, public training bases, and various vocational skills training organisations shall be encouraged and supported to innovate talent cultivation models, strengthen vocational education and training, and cultivate professional personnel and industrial workers who meet the demands of high-quality development in the private economy.

The human resources and social security departments shall establish and improve human resources service mechanisms, build platforms for matching employment and job-seeking information, and facilitate recruitment and employment for private economic organisations.

People's governments at all levels and their relevant departments shall refine talent incentive and service guarantee policies, streamline professional title evaluation channels for private economic organisations, and support their recruitment and cultivation of high-level and scarce talent.

[Interpretation of Provisions]

Legislative Background and Purpose: Talent constitutes the core element for private economic development. This provision aims to provide talent support for private economic growth through multiple dimensions including talent cultivation, supply-demand matching, and incentive safeguards.

Interpretation of Provisions:

a. First Paragraph: Talent Cultivation:

● ‘Encourage and support... innovative talent cultivation models’: Encourages various education and training institutions to adjust their specialisations, teaching content, and cultivation methods according to market demand.

● ‘Strengthen vocational education and training’: Emphasises the importance of vocational education and skills training.

● ‘Cultivate professional talents and industrial workers that meet the needs of high-quality development in the private economy’: The goal of talent cultivation is to match the actual needs of the private economy, particularly for technical and skilled personnel.

b. Paragraph 2: Human Resources Services and Matching:

● ‘Human resources and social security departments shall establish and improve human resources service mechanisms’: Requires these departments to enhance the public employment service system.

● ‘Establish platforms for matching employment and job-seeking information’: Facilitates effective alignment between corporate staffing needs and jobseeker profiles through diverse online and offline channels, such as public recruitment portals and job fairs.

● ‘Facilitate recruitment for private economic entities’: Address enterprises' difficulties in hiring personnel.

c. Paragraph Three: Talent Incentives and Service Guarantees:

● ‘Refine talent incentive and service guarantee policies’: Including settlement subsidies, research funding support, tax incentives, housing provisions, children's education, and healthcare.

● ‘Streamlining professional title evaluation channels for private economic organisations’: Ensuring private enterprise technical professionals enjoy equal rights and opportunities with state-owned enterprise personnel in title applications and evaluations.

● ‘Supporting private economic organisations in attracting and cultivating high-level and scarce talent’: Providing targeted recruitment and development policies for urgently needed high-end and key skilled personnel.

【Relevant Legislation】

● Vocational Education Law of the People's Republic of China.

● Employment Promotion Law of the People's Republic of China.

● Interim Regulations on the Human Resources Market.

● National and local policy documents concerning deepening industry-education integration, strengthening vocational skills training, optimising talent development environments, and improving professional title evaluation systems.

【Practical Guidelines】

a. Private enterprises participating in talent cultivation and recruitment:

● Actively engage in university-enterprise collaborations with higher education institutions and vocational colleges to establish joint internship and training bases, implementing order-based talent cultivation.

● Utilise government-established recruitment platforms and talent policies to attract required personnel.

● Support eligible employees in applying for professional titles.

b. Government departments optimising talent services:

● Education, human resources, and other relevant departments should dynamically adjust talent cultivation plans based on industrial development needs.

● Enhance the digitalisation of public employment services to improve efficiency in matching supply and demand.

● Remove institutional barriers to talent mobility, ensuring private enterprises enjoy equal treatment in talent recruitment, development, evaluation, and incentives.

● Effectively implement all talent incentive and service guarantee policies.

c. Leveraging Market-Oriented Human Resources Service Providers: Encourage and support specialised human resources service agencies to provide recruitment, training, assessment, and staffing services to private enterprises.

(To be continued)

Special Notice:

This article is an original work by a lawyer of JAVY Law Firm and represents solely the author's personal views. It shall not be construed as formal legal advice or recommendations issued by JAVY Law Firm or its lawyers. Should any content herein be reproduced or referenced, the source must be duly acknowledged.