Tag Archives: Effective Control

DRAFT FOREIGN INVESTMENT LAW
Dec. 2014 to Feb. 2015 China Bulletin

Giving with One Hand, Taking with the Other:

The Ministry of Commerce released the PRC Foreign Investment Law (Draft for Comments) on January 19 for public comment.

On the positive side, the Draft Law 1) replaces the encouraged, restricted and prohibited industry lists with a single “negative list” of industries restricted or prohibited to foreign investment, 2) replaces the foreign investment approval system and its time-consuming procedures with a simpler reporting system for non-restricted industries, and 3) repeals the current three foreign-invested enterprise laws (for wholly-owned subsidiaries and joint ventures), reverting to the PRC Company Law as the uniform basis for corporate structure and governance. Continue reading