China Releases New Regulations for Foreign Investment

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BEIJING, Apr. 14 – China’s State Council released new foreign investment regulations on Tuesday, aiming to both promote a good business climate while also cutting funds to projects which harm the environment.

The new policies will continue to support Chinese A-share listed companies in promoting domestic and foreign investment. The guidelines will also standardize foreign companies’ domestic investment in addition to corporate mergers and acquisitions. Companies targeted include those in high-tech industries, service sectors, energy-saving, and environmentally friendly projects.

According to the new regulations, a national security examination mechanism will be introduced soon for foreign-funded companies’ merger and acquisition operations in China, and qualified companies are allowed to issue corporate bonds or medium-term bills and to go public.

The regulations also encourage foreign enterprises to set up regional headquarters, research and development centers, procurement hubs, financial management and other functional offices in China, especially in central and western regions with environmentally friendly and labor-intensive projects.

Importing items and equipment for scientific and technological development by qualified foreign-funded R&D centers will be exempt from tariffs, importing value-added tax and goods and services tax by the end of 2010.

2 thoughts on “China Releases New Regulations for Foreign Investment

    Chris Devonshire-Ellis says:

    This is long awaited news, and will reform the existing system of foreign company requirements for being able to list on either the Shanghai and Shenzhen bourses, which to date is only experimental. It means foreign invested companies will for the first time be able to raise money locally for expansion and development plans. This will radically alter the FDI scope for investment in China and further pave the way for ultimately freeing the RMB to trade on the global markets. – Chris

    Bob Rutz says:

    Chris –

    This relates directly to my email to you yesterday at USAMay2010@dezshira.com.

    I look forward to discussing this with you in Manhattan!

    Bob Rutz

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