Category Archives: Trade & Investment

APPROVAL CHANGED TO FILING FOR THE RECORD
Oct. 2016

The Standing Committee of the National People’s Congress abolished the approval requirement for foreign projects in China (FIEs, including wholly foreign-owned enterprises and joint ventures) in September.  No longer do such projects have to undergo the time-consuming and sometiems costly approval process, unless they fall within a negative list (discussed below).  Projects not on the negative list need only make a simplified record filing through an online system no later than 30 days after issuance of the Business License.. Continue reading

DRAFT FOREIGN INVESTMENT LAW
Nov. 2015

The Ministry of Commerce released the PRC Foreign Investment Law (Draft for Comments) (“Draft Law”) in early 2015 for public comment. Although some provisions may change in the final version, which is still under revision and expect to be promulgated is late 2016 or 2017, the Draft Law represents a paradigm shift for foreign investment. It includes both good and bad news for U.S. investors in China. Continue reading

NATIONAL SECURITY LAW PASSED
Mar. to Jun. 2015 China Bulletin

The Standing Committee of the National People’s Congress has just adopted the National Security Law, which was introduced in draft form in December, 2014.  It is part of a group of laws on terrorism, cybersecurity and non-governmental organizations that have been criticized by foreign governments, businesses, journalist groups (including groups in Hong Kong and Taiwan) and others as vague and problematic, Continue reading

CAPITAL VERIFICATION REPORT – STILL REQUIRED?
Mar. to Jun. 2015 China Bulletin

As reported in New Foreign Exchange Rules for FIEs, a foreign invested enterprise (FIE) in China should no longer be required to apply through the State Administration for Foreign Exchange (SAFE) to verify receipt of an injection of paid-in capital.  It need no longer hire a qualified CPA to produce a Capital Verification Report (CVR).  Instead, the FIE can request its SAFE-certified bank handle the capital registration procedure. Continue reading

USING ELECTRONIC EVIDENCE IN CHINA
Mar. to Jun. 2015 China Bulletin

Electronic signatures that meet certain conditions have been valid in China since the PRC Electronic Signature Law came into effect in 2005, and other electronic data is recognized as admissible in court.  However, Chinese courts have proven reluctant to admit electronic data in practice because it can be easily altered and its authenticity is typically open to challenge.  In an interpretation issued January 30, 2015, the Supreme People’s Court (SPC) for the first time Continue reading

LOCAL INCENTIVES REVOKED
Mar. to Jun. 2015 China Bulletin

The State Council and Ministry of Finance took a decisive stroke by issuing the Notice Regarding Cleaning Up and Standardizing Preferential Policies in November 2014 (Notice 62), possibly ending a decades long tug-of-war over preferential incentives local governments use to attract investment.  Existing incentives were to be reported to the State Council and cleaned-up on a consolidated basis by March, 2015, provoking an outcry from companies such as Continue reading

PROGRESS IN “BITS” WITH US AND EU
Mar. to Jun. 2015 China Bulletin

China and the United States recently made a commitment exchange revised “negative lists” in September and speed up talks on a bilateral investment treaty (BIT).  Also, China’s premier, Li Keqiang, recently urged early conclusion of negotiations on a BIT with the European Union.  Most member EU states have BITs with China, but many are out of date.  BITs facilitate cross-border investment Continue reading

JUNE 30th DEADLINE FOR ANNUAL INSPECTION
Mar. to Jun. 2015 China Bulletin

As a reminder, the annual filing for subsidiaries and representative offices in China must be submitted not later than June 30th.  Representative offices are still subject to inspection, but the inspection of companies in China, including foreign-invested enterprise subsidiaries (“FIEs”), was abolished in 2014.  FIEs no longer need to submit paper documents to the authorities, but still must complete an annual filing through designated government online systems.  Penalties for failing to file include a fine Continue reading

FOREIGN INVESTMENT LAW UPDATE
Mar. to Jun. 2015 China Bulletin

The PRC Foreign Investment Law (Draft for Comments)released in January,  promises to substantially change the foreign investment regime in China (see Feb 2015 China Bulletin).  The revised law, when issued, will level the playing field by effectively eliminating “foreign invested enterprises” (FIEs) as a separate category in many industries in China. It will allow an FIE to be registered almost as quickly Continue reading

NEW FREE TRADE ZONES
Mar. to Jun. 2015 China Bulletin

A number of foreign investment pilot reforms were instituted in the Shanghai Free Trade Zone (SFTZ) since it was established in 2013.  At the end of 2014, the State Council approved the establishment of three new free trade zones (FTZs) in Tianjin, Fujian and Guangdong, and expanded the area of the SFTZ to include the Lujiazui Financial District, Jinqiaqo Development Zone and Zhangjiang Hi-Tech Park. Continue reading