China Says No More Foreign Investments Approval
On September 3 2016, the Standing Committee of the National People’s Congress of the Peoples’ Republic of China (NPC) adopted the amendments which modified the rules relating to the establishment and alterations of the foreign-invested enterprises (FIEs).
What’s new? On September 3 2016, the Standing Committee of the National People’s Congress of the Peoples’ Republic of China (NPC) adopted the amendments which modified the rules relating to the establishment and alterations of the foreign-invested enterprises (FIEs). Are considered FIEs: equity joint ventures (EJV), cooperative joint ventures (CJV), wholly-owned foreign enterprises (WFOE). The new rules finally put an end to the complex and time-wasting process of examination and approval that FIEs had to go through. According to the new amendments which came into effect on October 1 and were published last night, FIEs will now be subject to record-filing procedures instead of the existing approval measures (Articles 26 and 27). This small change might have gone unnoticed but this is great news for anyone wishing to start a business in China. Indeed, from now on FIEs that are not involved in industries listed on the ‘Negative List’ (which identifies sectors and businesses that are off-limits or restricted for investment), will no longer be subject to the approval by the administration. Instead, the prospective investor will only be subject to record-filing with the Ministry of Commerce which will be carried through an online application system. Three-days, this is all it will take for the record-filling to be processed (granted of course that the required documents are submitted). Here are below the documents that you will need: Company name. Letter of Commitment. Certificate of investors or their representatives, including the POA and the consignee’s ID. Certificate of the investors consigning the consignee to sign relative documents, including the POA and the consignee’s ID (if someone is consigned). Certificate of incorporation or ID of a natural person. The legal representative’s ID. What’s next? This amendment sends the signal to current and potential foreign investors that China is truly open for business. “We hope that China will remain an attractive destination for foreign investment. We need foreign investment for economic growth, and more importantly, we need new managerial expertise and advanced technologies that foreign investment brings,” Li Keqiang, the Premier of the State Council of China, said couple days ago while attending the United Nations General Assembly at New York. Facing the waning of the international investment trend, China is now compelled to wander out of its comfort zone and implement strategies that were definitely not at the top of its priority list if at all.