Anyone wanting to set up a foreign-backed enterprise needs to go through a registration and approval system in accordance with Chinese law, with the approval depending on the amount of investment, and the type of project as specified in the catalogue for the Guidance of Industries for Foreign Investment.

The catalogue states that the provincial economic cooperation department is responsible for the establishment or alteration of a company by a foreign-funded enterprise, and that an investment of $300 million or less puts it in the "encouraged" and "permitted" category, while an investment of $50 million puts it in the "restricted" category.

The amount of investment is to the same as the registered capital of a foreign-invested joint stock enterprise, or the net assessed assets of a restructured one, or the volume of transactions for a Chinese enterprise acquired by or merged with a foreign investor.

Provincial authorities are also responsible for any increase in capital investment, the establishment and alternation of an encouraged foreign-invested enterprise exceeding the norm, a foreign-funded investor with registered capital of $300 million or less and a business-starting investor with foreign investment of $300 million or less, or the establishment and alternation of a foreign-funded enterprise in the services sector that has not been required by law to be handled by the Ministry of Commerce.

The catalogue states that the establishment and alteration of a foreign-funded enterprise investing $50 million or less in the "encouraged" and "permitted" category can be approved by a local authority or a development zone with such a privilege (except for one involving State controls, special industry restrictions, and mergers and acquisitions, and one stipulated by law to be handled by a provincial commerce dept).

To honor its WTO commitments, China has passed more than 40 laws and regulations related to foreign investment in services and trade, including finance, commerce, transportation, and film and television production.