Regulations on Security Services - 国务院发布保安服务管理条例
Released on October 19, 2009, and effective on January 1, 2010
On October 19, 2009, the State Council promulgated the Regulations on Administration of Security Services (the “Regulations”) and the Regulations will be enacted on January 1, 2010. The Regulations introduce nationally unified requirements for security services and state that:
· "Security Services" supplied by a security services company are defined as follows: entrance guarding, security patrol, personal and property protection, secure transport, bodyguards, security check and security technology guarding, security risk assessment, and other security services. To be a security service company, it must meet certain conditions, including registered capital of no less than RMB1 million. If it is supplying armed guards and secure transport services, it should satisfy some additional requirements, including registered capital of no less than RMB10 million and stated owned investor(s) holding a minimum 51% equity.
· All service security companies must seek prior approval and obtain a security services license before its business registration at the relevant administrations of industry and commerce.
· Foreign investors can only have a joint venture with local SOEs to invest in such type of security service companies supplying armed guards and secure transport services, and foreign ownership cannot be over 49%.
· These Regulations also prohibit foreign invested companies (including WFOEs, EJVs or CJVs) from supplying security services to “key entities under security and safeguard” (治安保卫重点单位), which relate to national security and state secrets.