USCBC Administrative Licensing Report 2016

Executive Summary
• Companies regularly cite licensing as a top challenge for conducting business in China. Over
the past decade, the issue has consistently ranked among the top 10 priority issues in the USChina
Business Council (USCBC)’s annual membership survey.
• As is the case in many other jurisdictions, companies operating in China are often required to
possess a number of different licenses, permits, and certifications to operate legally in the
market. However, depending on industry sector, companies may need up to 100 licenses,
many requiring frequent renewal.
• Despite central government efforts to simplify or reduce the licensing burden on foreign
companies, a number of key concerns remain. More developed cities in eastern China have
enjoyed the most notable improvements, while limited progress remains in central and
western jurisdictions.
• Lack of transparency in licensing processes creates operational uncertainty for companies in
China—particularly for compliance—with inconsistent procedural timelines, regulatory
implementation, and document requirements. Foreign companies report frequent difficulties
obtaining licenses that are readily available to domestic competitors.
• Lack of coordination and communication between domestic government agencies, provinces,
and other regulators slows and inhibits licensing approvals.
• Companies also report difficulty in gaining routine access to appropriate officials for guidance
on licensing processes because of China’s anti-corruption campaign. The campaign has made
local government agencies more hesitant to make consequential licensing decisions or to
suggest qualified local third-party service providers. Delays for new facilities, expansions, and
other projects result as licensing applications languish.
• Best Practices: To smooth licensing application and renewal processes, USCBC member
company executives recommend establishing internal teams to conduct regular reviews of
existing and needed licenses and permits. Companies also emphasize the importance of
advanced consultation with local regulators prior to undertaking a new project, relocation, or
other endeavor requiring a license.