The New China’s Foreign Investment Law
The law, who will come into effect on 1st January 2020, aims to provide equal access to the Chinese market and legal protection as domestic companies.
It will then replace China’s current Chinese-Foreign Equity Joint Ventures Law, Wholly Foreign-Owned Enterprises Law and Chinese-Foreign Contractual Joint Ventures Law, all of which were enacted in the early years of the country’s economic reform.
- Application of the recording regime to corporate changes of FIEs
The following changes are now subject to record filing instead of MOFCOM approval:
- change of the basic information of FIEs (including name, registered address, business scope, registered capital, organizational structure, legal representative, the information, contact persons and contact methods of the final actual control person of the foreign-funded enterprises),
- change of the basic information of FIEs’ shareholders,
- changes in equity (shares) or equity cooperation, including equity pledge,
- merger, division or dissolution,
- foreign-invested enterprise mortgaging its property or rights and interests to others,
- advance recovery of investments by foreign partners of Sino-foreign cooperative joint ventures,
- entrusted operation administration of Sino-foreign cooperative joint ventures.
Record-filing of those changes shall be made within 30 days upon the occurrence of the change.
- Simplified administrative procedure
The registration of a new FIE will be subject to a simplified administrative procedure. Indeed, a feasibility study report or a bank reference letter issued by the bank of the investor is not anymore required. Yet, the disclosure of additional information such as the “ultimate controllers” of the FIE is now requested.
Furthermore, any change of a FIE’s ultimate effective controller needs to be filed with Local MOFCOM as well.
For any information regarding the new china’s foreign investment law, please contact our team at email@example.com or by Tel + 86 187 177 31958.