Naming your foreign investment enterprise

When establishing an enterprise in the PRC, it is necessary to apply for a preliminary review of its name. The enterprise will enjoy the rights in its name from the date of its establishment. The main rules governing the names of enterprises are the Registration of Enterprise Names Administrative Provisions, the Registration and Administration of Enterprise Names Implementing Measures issued by the State Administration for Industry and Commerce (SAIC), and various local regulations. Understanding the rules is key for foreign investors choosing and protecting names for their enterprises.

Composition of names

The term “enterprise name” refers to an enterprise’s Chinese-language name, and has four parts: the administrative regional division, trade name, industry category and organizational form, in that order.

A foreign investment enterprise (FIE) may be exempted from the requirement to commence its name with the administrative regional division in which it is located, and certain FIEs may use the Chinese characters for “China” in their names. The trade name of an enterprise should be composed of two or more Chinese characters. Depending on local regulations, enterprises satisfying certain conditions may use special industry appellations such as “industry”, “development”, “exploitation”, “engineering”, “science and technology”, “environmental protection” and “equity investment”; particular words equivalent to “phase I”, “phase II”, “phase III”, “headquarters”, “regional headquarters”, etc.; or the generic name or abbreviation for an institute of higher learning or research institute.

Administrations for industry and commerce (AICs) do not register the foreign language names of FIEs. If an enterprise needs to translate its name into a foreign language, it may do so.

Can numerals be used?

The Implementing Measures specify that Arabic numerals may not be used in an enterprise name. However, there are exceptions in various regions. For example, the Actively Supporting Enterprise Innovation and Reorganization Several Opinions, issued by the Shanghai Municipal Administration for Industry and Commerce this year, permit “cultural innovation enterprises” that meet certain conditions to use foreign letters and Arabic numerals in their trade names. The Employing Industry and Commerce Functions to Promote the Development of Enterprises Several Opinions issued by the Fuzhou Municipal Administration for Industry and Commerce last year specify that when an enterprise with an internationally famous brand registers or amends its registration in Fuzhou, it can apply to register a name containing Arabic numerals or English letters. According to media reports, the Quanzhou Municipal Administration for Industry and Commerce permits enterprises established in Quanzhou by internationally famous enterprises “to use the English letters or Arabic numerals in the investor’s name as their trade names”.

Chinese numerals may be used in an enterprise name, with the exception of the equivalent of “8/1”, which signifies the date of establishment of the People’s Liberation Army, unless “8/1” appears as part of the geographical name of the enterprise and only if that would not cause confusion among the public.

Can foreign words be used?

Both the Administrative Provisions and Implementing Measures prohibit the use of pinyin (the system of rendering Chinese characters in the Latin alphabet) in enterprise names. In the 1996 Regulating the Words Used in Enterprise Names, Trademarks and Advertisements Notice, the SAIC specified that the trade name of an foreign enterprise that makes a capital contribution to an FIE may be used in the name of that enterprise, provided that the trade name is translated into Chinese characters. However, in practice, some enterprises have used foreign language letters in their names without translating them into Chinese characters.

Moreover, the foreign language names or abbreviations of numerous foreign enterprises are familiar to the Chinese public, and requiring them to translate their famous trade names into Chinese characters may be considered unreasonable. Accordingly, in recent years, there has been some easing in this respect. In addition to the measures in Shanghai, Fuzhou and Quanzhou mentioned above, the Fujian Provincial People’s Government Supporting the Development of Taiwan-Invested Enterprises Several Opinions permit Taiwan-invested enterprises to use the English letters of their well-known or famous trade names commonly used in Taiwan as the trade name portion of their enterprise names.

The Fujian provincial AIC has taken the further step of permitting FIEs to use the English letters of world-renowned trade names commonly used by their foreign parent companies as the trade name part of their enterprise names. The 2011 Tianjin Municipality Further Supporting the Accelerated Development of Taiwan-Invested Enterprises Opinions permit Taiwan-invested enterprises to use terms from the local Taiwan dialect or the English language abbreviation of the investor’s name as the trade name portion of their enterprise names.

Rights and remedies

An exclusive right to use an enterprise name is subject both to the jurisdictional limitation of the AIC concerned and the limitation of being in the same industry. However, a famous enterprise that is widely known to the public nationwide may be exempted from the requirement to commence its name with the name of the administrative regional division, and the approval of its name should be carried out by the SAIC. Accordingly, it enjoys the exclusive right to use its enterprise name nationwide.

By registering the trade name of an enterprise as a trademark, trademark protection may be secured in addition to the exclusive right to use the enterprise name.

The protection accorded to the names of foreign enterprises surpasses that accorded to PRC enterprises. Pursuant to the Implementing Measures and the Paris Convention, the name of a foreign enterprise should be accorded protection regardless of whether it has been registered.

Pursuant to the SAIC Resolving Several Issues Concerning Trademarks and Enterprise Names Opinions, an enterprise may submit a written complaint to an AIC at the provincial level or above. An enterprise may also take legal action under the PRC Anti-unfair Competition Law and the interpretations of the Supreme People’s Court on the protection of enterprise names.

No approval needed to rename

Pursuant to the Issues Relevant to the Administration of Foreign Investment Notice issued by the Ministry of Commerce earlier this year, an FIE no longer needs MOFCOM approval when it changes its name. It only needs to carry out recordal procedures after it has carried out the procedures for amendment of its business registration.

Kevin Xu is a partner at Martin Hu & Partners (MHP Law Firm)