Friday March 20 2015

News Source: Global Disclosures

Focus: Foreign Investment

Type: General

Country: China




The National Development and Reform Commission and the Ministry of Commerce have published the revised Catalogue for the Guidance of Foreign Investment Industries. The Catalogue will enter into force on April 10, 2015.

The Guidance Catalogue continues to be comprised of encouraged, restricted and prohibited sectors. Industries not listed in the Catalogue are deemed to be permitted.

Under the 2015 Catalogue, Chinese ownership requirements and form of investment restrictions will be removed from more than half of the “encouraged” industries, which means that foreign investors in these industries can operate their businesses in China through wholly foreign-owned enterprises. This includes accounting, the construction and operation of rail transit; operation of performance venues; design and manufacture of transportation equipment; airborne equipment for civil aviation and yachts; manufacture of electric machinery and equipment; and manufacture and R&D of automobile electronic devices.

The 2015 Catalogue will also remove more than 40 industries from the “restricted” category, allowing foreign investors to freely invest in these industries without restrictions. This includes a large number of manufacturing industries (excluding arms manufacturing), e-commerce for technology media and telecommunications businesses, certain real estate activities, non-bank financial institutions, trust companies and currency brokerages.

A number of industries are being moved under tighter regulation. For example, the manufacture of whole units of automobiles have been moved from being permitted to being restricted – the Chinese shares in a Sino-foreign joint venture here may not be less than 50 percent. Additionally, the medical institutions industry has been made restricted, and investors will only be able to operate medical institutions through cooperative joint ventures or equity joint ventures.

Click on the above link for the Catalogue (in Chinese).