China continues its policy of openness towards foreign investments by simplifying the approval procedure regarding the FIEs (foreign investment enterprises). Starting from October 1st 2016, simpler rules for opening and approval of joint ventures or wholly foreign owned companies are in force, thanks to the changes made to Chinese laws regulating such entities. The essential novelty just introduced is essentially about editing the authorization regime, which will turn from the approval system ("case-by-case approval") by the Ministry of Commerce to a much more streamlined system that provides easy filing demand. The simplification will obviously be operative for companies with foreign participations whose objects are not contained in the Negative List, ie the list of sectors in which foreign investment is prohibited or subject to special restrictions.

 

Since the entry into force of the new rules (1 October 2016), the foreign-owned Chinese companies can then take advantage of the filing process to the Ministry of Commerce, which will be carried out before obtaining the business license or within thirty days from obtaining the same. The same filing may also be made electronically and will no longer need to provide the joint venture agreement and the feasibility study.

 

It is likely consider that the modifications to the approval procedure as well as briefly described above will result in a reduction of costs and timing for the start of activities by the joint venture or wholly foreign capital, thereby increasing the opportunities to undertake initiatives business in China.

 

For more information: asiandesk@blblex.it