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POTENTIAL CHANGE OF CHINA’S FOREIGN INVESTMENT LAWS AND ITS EFFECT ON VIE STRUCTURES By Steve ZHAO 2015-08-05

1.Introduction

On 19 January 2015, the Chinese Ministry of Commerce (MOFCOM) announced the Foreign Investment Law of the People’s Republic of China (Draft for Public Opinions) (the Draft for Public Opinions), publicly seeking input from society at large.  Any interested party may put forth opinions and recommendations on the draft prior to 17 February 2015.  As soon as this law (the Foreign Investment Law) is passed, it will combine the former three foreign investment laws into one and bring the case-by-case approval and management model for foreign investment to an end, and China will enter a new era of “limited approvals with full-scale reporting” for the regulation of foreign investment.  That is to say, foreign investors making investments in items on the negative list will need to apply for an investment entry approval; at the same time, foreign investors making investments in Chinese territory will all need to fulfill reporting obligations, regardless of whether the investment is in an area on the negative list.

 

POTENTIAL CHANGE OF CHINA’S FOREIGN INVESTMENT LAWS AND ITS EFFECT ON VIE STRUCTURES.pdf