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Wholly Foreign Owned Entertainment Venues are Permitted in China Now

Recently, the Ministry of Culture and Tourism of the PRC released a Circular on Adjusting Approval Conditions for Entertainment Venues and Internet Access Locations, which allows foreign investors to set up wholly foreign owned entertainment venues in China’s mainland.

According to the foregoing Circular, foreign investors, investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and investors from Taiwan shall submit an application to the provincial administrative department of culture and tourism for establishing an entertainment venue in China’s mainland. The application documents, conditions for establishment and procedures involved are consistent with those for Chinese domestic investors.

According to the Regulations on the Administration of Entertainment Venues of the PRC, entertainment venues refer to places such as singing, dancing and amusement that are open to the public for profit-making purpose.

Previously, foreign investors are only allowed to open entertainment venues in a joint venture with a Chinese partner. Since 2013, China has attempted to gradually loosen restriction on the equity ratio of foreign investments in the establishment of entertainment venues. The progress is as follows:

1. In 2013, the establishment of wholly foreign owned entertainment venues was allowed for the first time in China (Shanghai) pilot free trade zone;

2. In 2015, the establishment of wholly foreign owned entertainment venues was allowed in China (Fujian) pilot free trade zone;

3. In 2018, the establishment of wholly foreign owned entertainment venues was allowed in all China pilot free trade zones;

4. Since 27 May 2021, the restriction on the equity ratio of foreign investments has been abolished and wholly foreign owned entertainment venues are allowed to be set up in China’s mainland.

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