Changes in China’s Foreign Investment Administration Reform
Changes in China’s Foreign Investment Administration Reform
October 12, 2016
Foreign-invested enterprises (FIEs) in China can presently enroll and report data changes through a documenting process instead of the case-by-case approval process that was already regulatory measures for market entree and it will be permitted to take benefit to this reform. This nationwide reform comes toward the end of a four pilots reform which occurred in Shanghai, Tianjin, Guangdong, and Fujian Free Trade Zones.
A couple key purposes of the change are:
1. The reform applies to solely foreign owned businesses, Sino-remote equity joint ventures, cooperative joint ventures, and businesses capitalized by foreign-funded investment businesses in China.
2. The change from endorsement to documenting applies to only green field investment. For company modification of FIEs through M&A, original endorsement from the Ministry of Commerce is required.
3. No negative rundown has been issued for the extension of the reform to classify the industries subject to special administrative measures for market entree.
The particular changes in data in a FIE which may now be accounted for through the documenting process are:
- Changes to the essential data of the FIE;
- Changes to the essential data of investors of the FIE;
- Changes to equity and in addition to right and interest in cooperation;
- Merger, division, and termination;
- Pledge and transfer of property right and interests of an solely foreign owned venture;
- Advance recovery of investment by foreign co-investors of cooperative Sino-remote joint venture;
- Entrusted operations organization of Sinoforeign agreeable joint ventures.
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