New era for International Funds to invest in China

• Author: Miao Wang,Jingjing Jiang
• Published date: 28 September 2016
• Date: 28 September 2016
• Subject Matter: International Investment Law

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This article was written by Jingjing Jiang and Miao Wang.

On September 3, 2016, the Standing Committee of the National People’s Congress

of the PRC promulgated the “Decision regarding the Amendment of the Four

Statutes Including the ‘Law of the People's Republic of China on Wholly Foreign-

Owned Enterprises’” (“Decision”). The highlight of the Decision is that for matters

that do not involve special administrative measures on foreign investment access

(“negative list”), a filing mechanism will apply. The negative list will be published or

approved by the State Council of the PRC.

On the same day, the Ministry of Commerce of the PRC promulgated the

“Provisional Measures on Filing Administration for the Establishment and Change of

Foreign-Owned Enterprises (draft for public consultation)” (“Provisional Measures”,

together with the Decision, the “New Rules”), which provides further details

regarding the filing system in relation to foreign investments. The New Rules will

take effect on October 1, 2016.

The implementation of the New Rules will to a large extent facilitate international

funds’ investments in China. It will have an impact in the following three areas:

direct investments by international funds in China,

investments by foreign-owned equity investment enterprises in China, and

parallel investments by international funds and onshore RMB funds.

1. Key contents of the New Rules

a) Scope of application

The New Rules apply to all kinds of foreign-owned enterprises which may be

established by international funds in China, as well as investments made by foreign-

invested investment companies, foreign-invested venture capital investment

28 September 2016

New era for International

Funds to invest in China