Thursday, 29 September 2016
China Updates- laws on foreign invested enterprises
The National People's Congress approved, effective 1st October, amendments to the various laws on foreign invested enterprises (FIEs – i.e. WFOEs and JVs), essentially rolling out nationwide the experimental rules already applicable within free trade zones (Shanghai, Guangdong, Tianjin and Fujian).
These will affect, inter alia, incorporations of FIEs, changes to their capital structures, mergers and transfers, and will require a simple record filing procedure.
This will mean significant changes in relation to the establishment of foreign invested enterprises (FIEs) and the structure thereof in China – it will not require the approval from the Ministry of Commerce (MOFCOM) or its local branches, as long as the business undertaken is not on a "negative list".
MOFCOM has simultaneously issued draft record filing procedures for public comment.The “Negative List”, however, has not yet been issued. (It is likely to be the same as the list used in the free trade zones.)
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