China’s NDRC Issued Answers to FAQs on Outbound Investment, Clarifying the Application Scope of Sensitive Projects

• Author: Huang Mengting,Wang Kaiding,Tang Xinran
• Published date: 16 July 2018
• Date: 16 July 2018

2020/11/10

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CHINA LAW INSIGHT

China’s NDRC Issued Answers to FAQs on

Outbound Investment, Clarifying the Application

Scope of Sensitive Projects

By King & Wood Mallesons on July 16, 2018

by： Wang Kaiding, Huang Mengting Tang Xinran King & Wood Mallesons

In June 2018, the National Development and Reform Commission (“NDRC”) released the

Answers to Frequently Asked Questions Concerning Outbound Investment by Enterprises

(“Answers to FAQs”) on its official website, providing clarification to 61 frequently asked

questions regarding the application of the new Administrative Measures for Enterprise

Outbound Investment (“Regulation No. 11”). It’s particularly worth noting that, the NDRC

made restrictive interpretations with respect to the scope of sensitive projects.According

to the Answers to FAQs, outbound investments in sensitive industries like “real estate”,

“hotel” and “setting up offshore equity investment funds or investment platforms

without specific underlying industrial projects” will not be categorized as sensitive

projects and therefore is not subject to the NDRC’s verification procedures for outbound

investment, provided that “they do not involve commitment of domestic assets or interests

or provision of onshore financing or guarantee and the entire capital is raised from

overseas.” However, if such investment involves commitment of domestic assets or

interests or provision of onshore financing or guarantee, they would still fall into the

category of sensitive projects which are subject to the NDRC’s verification procedures.