The latest edition of China’s foreign investment negative list has been released. The new list cuts down the number of items restricted or prohibited to foreign investors from 33 to 31, widening access to more industries and fields.
On December 27, 2021, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly issued the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition), which will come into effect on January 1, 2022.
As one of the most important documents governing foreign investment access in the China market, the China Briefing team has produced a quick translation for your reference.
For a summary and analysis of the major changes, see our article: China’s 2021 Negative Lists Widen Market Access for Foreign Investment.
I. The Special Administrative Measures (Negative List) for Foreign Investment Access (hereinafter referred to as the “Negative List for Foreign Investment Access”) sets out on a unified basis the special administrative measures for foreign investment access such as equity requirements, senior management personnel requirements, etc. Fields not mentioned in the Negative List for Foreign Investment Access are administered under the principle of equal treatment for domestic and foreign capitals. Domestic and foreign investors shall uniformly apply the relevant provisions of the Negative List for Market Access.
II. No overseas investor may engage in investment and business activities in the capacity of an individually owned business, an investor in a sole proprietorship enterprise, or a member of a farmers’ cooperative.
III. Foreign-invested enterprises investing in China should comply with relevant provisions of the Negative List for Foreign Investment Access.
IV. When performing duties pursuant to the law, the relevant authorities shall not process relevant matters including application for a permit, enterprise registration, etc. for proposed investments by overseas investors in fields mentioned in the Negative List for Foreign Investment Access that does not comply with the provisions of the Negative List for Foreign Investment Access; where approval for a fixed asset investment project is involved, the relevant approval matters shall not be processed. No foreign-invested partnership business may be established in any investment field subject to equity requirements.
V. Upon review by the relevant competent departments of the State Council and approval by the State Council, the provisions of the Negative List for Foreign Investment Access on the relevant fields may not apply to specific foreign investments.
VI. Domestic enterprises engaged in businesses in fields prohibited from investment mentioned in the Negative List for Foreign Investment Access shall be examined and approved by the relevant competent authorities of the state for issuing shares abroad and going public for trading; Overseas investors shall not participate in the operation and management of the enterprises, and their equity ratio shall be governed by reference to the relevant regulations on the management of domestic securities investment of overseas investors.
VII. Where domestic companies, enterprises, or natural persons merge or acquire their affiliated domestic companies through a company legally established or controlled overseas thereby, the relevant provisions on foreign investment, overseas investment, foreign exchange administration, etc. shall apply.
VIII. The cultural, financial, and other fields not listed in the Negative List for Foreign Investment Access and relevant measures for administrative approval, qualifications, and national security shall be subject to the existing provisions.
IX. Where the Mainland and Hong Kong Closer Economic Partnership Arrangement and their follow-up agreements, the Mainland and Macau Closer Economic Partnership Arrangement and their subsequent agreements, the Cross-Straits Economic Cooperation Framework Agreement and their subsequent agreements, or the international treaties or agreements to which China accedes or is a signatory contain more preferential provisions on access treatment for overseas investors, the relevant provisions may apply. If more preferential opening-up measures are taken for eligible investors in special economic zones such as pilot free trade zones, relevant provisions shall apply.
X. The Negative List for Foreign Investment Access shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in concert with the relevant authorities.
XI. The Negative List for Foreign Investment Access (2020 Edition) issued by the National Development and Reform Commission and the Ministry of Commerce on June 23, 2020 will be abolished as of January 1, 2022.
Disclaimer: The translation was produced by the China Briefing team for general information purposes only. No liability is assumed for the accuracy of the content. For advice on your speciﬁc business queries, please contact a qualiﬁed professional advisor. You are welcome to consult our experts at Dezan Shira & Associates by emailing us at China@dezshira.com.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at email@example.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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