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China to Relax Restrictions on Foreign-Invested Travel Agencies

February 20, 2009

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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