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0 White Paper on the Business Environment in China
investment ventures with foreign persons. Pilot Zone, the State Council proposed to study the
The Implementation Regulations, Article 33 will management pattern of “national treatment prior
eliminate the previous restrictions on joint to admission + negative list.”
investment by Chinese natural persons with
foreign investors, and allows them to be potential In October 2016, in the Interim Measures for the
investors in foreign-invested enterprises. Administration of the Establishment and Change of
Report and Record for Foreign-invested Enterprises
In addition, Hong Kong, Macao and Taiwan (hereinafter Measures), the “approval system”
investors are not defined as “foreign investors”, required of foreign investors and implemented for
namely they are not the investment subjects more than 40 years, was eliminated. The Measures
set forth in this Law. The Foreign Investment Law states that, in addition to the “special administrative
does not specify whether or not investors from measures for admission required by the State”,
Hong Kong, Macao and Taiwan are covered by regarding establishment and changes, foreign-
this law, however, the Implementation Regulations invested enterprises are only required to apply to
Article 444 states that investments from Hong the Ministry of Commerce for filing applications for
Kong, Macao and Taiwan shall be governed by the foreign investment rather than requiring approval.
Foreign Investment Law and the Implementation Moreover, due to the Measures, a filing system for
Regulations, except as otherwise provided by law, foreign investment in China has been established.
administrative regulations or by the State Council.
While most foreign investors in China will only
Section 2. Foreign Investors are no require registration and need not go through
Longer Required to Obtain Government approval procedures, nevertheless, there is a list
Permission for their Investment Project that restricts, prohibits, or encourages foreign
investment in certain industries. In June 2017, the
Previously all foreign investors had to go National Development and Reform Commission
through numerous government procedures to and the Ministry of Commerce revised the
obtain permission for all foreign investments. Guidance for Foreign Investment Industry (2017
Article 4 of the Foreign Investment Law 5 conducts Revision), and in June 2018, this Guidance was
trial runs for every provision in the law. In revised as the Special Management Measures for
September 2013, in the Notice on the Issuance of Foreign Investment Admission (Negative List) (2018
the General Plan of the China (Shanghai) Free Trade Edition), which advised on 48 special management
measures for foreign investment admission in 34
3 Article 3 of the Implementation Regulation (Draft for Solicitation fields.
of Opinions) reads, “Foreign investors may, pursuant to laws, in-
vest in China individually or jointly with other investors, including
natural persons in China.”
4 Article 44 of the Implementation Regulation (Draft for Solici-
tation of Opinions) reads, “Investors of the Hong Kong Special
Administrative Region and the Macao Special Administrative Re-
gion shall invest in the Mainland in accordance with the Foreign
Investment Law and this Article, unless otherwise provided by
laws, administrative regulations or the State Council.”
5 Article 4 of the Foreign Investment Law reads, “The State
implements the management plan of ‘national treatment prior to
admission + negative list’ for foreign investment.
The term ‘national treatment prior to admission’ refers to afford-
ing foreign investors and their investments treatment, during the
investment access stage, no less favorable than that afforded to
Chinese domestic investors and their investment; and ‘negative
list’ refers to the special administrative measures on admission
that are implemented in certain fields for foreign investment as
prescribed by the State. The State affords national treatment to
foreign investment outside the negative list.
The negative list shall be issued or approved by the State Council.
If the international treaties or agreements concluded or partici-
pated in by the People’s Republic of China have more favorable
provisions on the treatment of foreign investors in admission,
they may be enforced in accordance with the relevant provisions.
"
78
investment ventures with foreign persons. Pilot Zone, the State Council proposed to study the
The Implementation Regulations, Article 33 will management pattern of “national treatment prior
eliminate the previous restrictions on joint to admission + negative list.”
investment by Chinese natural persons with
foreign investors, and allows them to be potential In October 2016, in the Interim Measures for the
investors in foreign-invested enterprises. Administration of the Establishment and Change of
Report and Record for Foreign-invested Enterprises
In addition, Hong Kong, Macao and Taiwan (hereinafter Measures), the “approval system”
investors are not defined as “foreign investors”, required of foreign investors and implemented for
namely they are not the investment subjects more than 40 years, was eliminated. The Measures
set forth in this Law. The Foreign Investment Law states that, in addition to the “special administrative
does not specify whether or not investors from measures for admission required by the State”,
Hong Kong, Macao and Taiwan are covered by regarding establishment and changes, foreign-
this law, however, the Implementation Regulations invested enterprises are only required to apply to
Article 444 states that investments from Hong the Ministry of Commerce for filing applications for
Kong, Macao and Taiwan shall be governed by the foreign investment rather than requiring approval.
Foreign Investment Law and the Implementation Moreover, due to the Measures, a filing system for
Regulations, except as otherwise provided by law, foreign investment in China has been established.
administrative regulations or by the State Council.
While most foreign investors in China will only
Section 2. Foreign Investors are no require registration and need not go through
Longer Required to Obtain Government approval procedures, nevertheless, there is a list
Permission for their Investment Project that restricts, prohibits, or encourages foreign
investment in certain industries. In June 2017, the
Previously all foreign investors had to go National Development and Reform Commission
through numerous government procedures to and the Ministry of Commerce revised the
obtain permission for all foreign investments. Guidance for Foreign Investment Industry (2017
Article 4 of the Foreign Investment Law 5 conducts Revision), and in June 2018, this Guidance was
trial runs for every provision in the law. In revised as the Special Management Measures for
September 2013, in the Notice on the Issuance of Foreign Investment Admission (Negative List) (2018
the General Plan of the China (Shanghai) Free Trade Edition), which advised on 48 special management
measures for foreign investment admission in 34
3 Article 3 of the Implementation Regulation (Draft for Solicitation fields.
of Opinions) reads, “Foreign investors may, pursuant to laws, in-
vest in China individually or jointly with other investors, including
natural persons in China.”
4 Article 44 of the Implementation Regulation (Draft for Solici-
tation of Opinions) reads, “Investors of the Hong Kong Special
Administrative Region and the Macao Special Administrative Re-
gion shall invest in the Mainland in accordance with the Foreign
Investment Law and this Article, unless otherwise provided by
laws, administrative regulations or the State Council.”
5 Article 4 of the Foreign Investment Law reads, “The State
implements the management plan of ‘national treatment prior to
admission + negative list’ for foreign investment.
The term ‘national treatment prior to admission’ refers to afford-
ing foreign investors and their investments treatment, during the
investment access stage, no less favorable than that afforded to
Chinese domestic investors and their investment; and ‘negative
list’ refers to the special administrative measures on admission
that are implemented in certain fields for foreign investment as
prescribed by the State. The State affords national treatment to
foreign investment outside the negative list.
The negative list shall be issued or approved by the State Council.
If the international treaties or agreements concluded or partici-
pated in by the People’s Republic of China have more favorable
provisions on the treatment of foreign investors in admission,
they may be enforced in accordance with the relevant provisions.
"
78
