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Only record-filing will be required for foreign investment if operation area
is not within the Negative List


9 September 2016
On 3 September 2016, the Standing Committee of the PRC National People's Congress issued a decision on revising Foreign-invested Enterprises Law and other three laws (the "Decision"), which has revised provisions of these laws in relation to administrative examination and approval for foreign investment. The Decision shall be implemented as from 1 October 2016.
The negative list management mode for foreign investment has been undergoing trial run in 4 FTZs in Shanghai, Guangdong, Tianjin, and Fujian as from October 2013. Now, with issuance of the Decision, the negative list management mode will be implemented nationwide.
According to revisions made by the Decision, if the business scope of a foreign investment enterprise is not within the operation areas which are subject to the special market entry management measures (negative list) pursuant to the state regulations, only record-filing with the competent department of commerce is required for establishment and alteration of such a foreign investment enterprise, while previously required examination and approval will no longer be required.
For carrying out the record-filing, the PRC Ministry of Commerce issued on 3 September 2016 the Interim Measures for Record-filing Administration on Establishment and Alteration of Foreign Investment Enterprises (Draft for Comments) (the "Draft Interim Measures"), which includes the following eye-catching points.
1 The record-filing may be carried out before company registration of such foreign investment enterprise, or within 30 days after completion of company registration and issuance of the business license.
2 The record-filing will be entirely carried out online via the "comprehensive management information system for foreign investment". The competent department of commerce in charge of record-filing shall finalize the record-filing within 3 working days after it has received all the information required for the record-filing.
3 The articles of association, joint venture contract and feasibility study report of such foreign investment enterprise as previously required to be submitted for examination and approval will no longer be required for the record-filing.
4 While having changed the administration from the required examination and approval to the record-filing, a number of provisions for the supervision afterwards have been incorporated into the Draft Interim Measures.

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Disclaimer
Any legal information contained in this newsletter is general in nature and laws and regulations are changing from time to time and compliance will always depend upon the particular circumstances. We have not attempted to give exhaustive descriptions of law or to give a legal opinion on specific legal issues. You should not rely on this newsletter as a legal advice for any particular purpose.

 

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