CHINA: National Peoples Congress Revises Inbound Investment Laws

Monday September 5 2016

China`s top legislature revised four laws on 03 September regulating inbound investment, with an easing of rules for foreign and Taiwanese investors looking to start businesses across China.

Legislators voted for and passed the revisions at the close of the National People`s Congress (NPC) Standing Committee`s bi-monthly session, which ran from Monday to Saturday.

Provisions have been added to four laws: the law on foreign-capital enterprises, the law on Chinese-foreign equity joint ventures, the law on Chinese-foreign contractual joint ventures, and the law on the protection of investment of Taiwanese compatriots.

All the revisions will take effect on 1st October 2016.

The revisions have suspended administrative approvals for foreign and Taiwanese investors setting up ventures regulated by the four laws, following successful trials in free trade zones (FTZ) in Shanghai, Guangdong, Tianjin and Fujian.

Such investors are only required to report business plans to local regulators if their business is on a “negative list.”

Additionally, the Ministry of Commerce (MOC) released a new set of supporting measures on foreign investors and those from Taiwan, Hong Kong and Macao reporting to the government, in a bid to avoid the regulatory vacuum after the revisions entering into force.

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