The Chinese Mainland Issued the Regulation on the Promotion of the Development of Individual Industrial and Commercial Households

December 2022

Karl Zhang and Teresa Huang

On September 26, 2022, the State Council adopted the Regulation on the Promotion of the Development of Individual Industrial and Commercial Households (hereinafter referred to as the “Regulation”), of which the main contents are as follows:

1. Scope of Application

The Regulation shall apply to any citizen with capacity for operations who is engaged in industrial and commercial operations in the territory of the People’s Republic of China and legally registered as an individual industrial and commercial household.  The state shall implement the principles of equal market access and fair treatment for individual industrial and commercial households.  At the same time, the permanent residents of the Hong Kong Special Administrative Region and the Macao Special Administrative Region with Chinese nationality and the residents of Taiwan Area may apply for registration as individual industrial and commercial households in accordance with relevant State regulations.

2. Registration and Annual Reporting

Market entities registration authorities shall provide individual industrial and commercial households with lawful, compliant, well-regulated, unified, open, transparent, easy, and efficient registration services.  The market regulatory department of the State Council shall, according to the development characteristics of individual industrial and commercial households, reform and improve the annual reporting system for individual industrial and commercial households, simplify contents, optimize processes, and provide simple and easy annual reporting services.

An individual industrial and commercial household may voluntarily change the operator or transform into an enterprise.  If an individual industrial and commercial household changes the operator, it may apply directly to the market entities registration authorities for modification registration.  If the change involves administrative licensing, the administrative licensing department shall simplify the procedures and provide convenience for individual industrial and commercial households in accordance with the law.  If an individual industrial and commercial household changes the operator or transforms into an enterprise, it shall settle the taxes payable in accordance with the law, make proper treatment of existing claims and debts, and shall not damage the legitimate rights and interests of others.

3. Prohibition of Discrimination and Unreasonable Restrictions

When formulating relevant policies and measures, the government and its relevant departments shall fully listen to the views of individual industrial and commercial households and related industry organizations, and shall not formulate or implement discriminatory policies and measures against individual industrial and commercial households in terms of qualification permit, project application, government procurement, bidding, etc. in violation of the relevant regulations.  The State shall guide and support individual industrial and commercial households to accelerate the digital development to achieve an online and offline integrated operation.  A platform operator shall provide support to individual industrial and commercial households’ online operations in terms of admission conditions, service rules and fees charged, and shall not use service agreements, platform rules, data algorithms, technology and other means to impose unreasonably restrictions, attach unreasonable conditions on or charge unreasonable fees from individual industrial and commercial households in the platform.

4. Illegal Charges and Forced Apportion Are Prohibited

Any unit or individual shall not charge fees from individual industrial and commercial households or do so in disguised form in violation of the laws and regulations and relevant State provisions, shall not expand the scope of charges or raise the standard of charges without permission, shall not collect funds from or make apportionment to individual industrial and commercial households, shall not force individual industrial and commercial households to provide sponsorship or receive paid services.  Government agencies, enterprises and public institutions shall not require individual industrial and commercial households to accept unreasonable payment schedules, methods, conditions and liabilities for breach of contract and other trading conditions, shall not default on paying the accounts payable to individual industrial and commercial households, and shall not default on paying the accounts payable to individual industrial and commercial households in a disguised form by forcing individual industrial and commercial households to accept commercial drafts and other non-cash payments.


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