February 20, 2009

China to Relax Restrictions on Foreign-Invested Travel Agencies

On February 20, 2009, the State Council released the Regulations on Travel Agencies (the "Regulations"), effective May 1, 2009. The Regulations relax restrictions on foreign-invested travel agencies and reflect China's commitment to agreements made upon its entrance into the World Trade Organization. According to the Regulations, wholly-foreign-invested travel agencies, which were previously forbidden, are now permitted in China. Furthermore, the Regulations loosen the statutory requirements for foreign-invested travel agencies, such as registered capital and investor qualifications, and now also permit the establishment of branch offices by foreign-invested travel agencies. Under the new Regulations, foreign-invested travel agencies generally have a legal status similar to domestic travel agencies. However, the Regulations still contain a requirement that foreign-invested travel agencies be pre-approved by the National Tourism Administration and the Ministry of Commerce ("MOFCOM"). Foreign-invested travel agencies are also subject to different rules for operating overseas traveling businesses targeted at PRC citizens.

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