China’s Ministry of Commerce has published a draft law that will see a major shake-up of the country’s foreign investment regime. Public consultation for the draft law will open until 17 February. This draft legislation, once issued, will replace the current legal scheme regulating foreign investments in China and will have major implications for overseas investors looking to continue, expand, or begin operations in China.
Overall, the new rules will grant foreign investors better and easier access to Chinese markets. However, for industries that are deemed to have national security implications, the government will impose further scrutiny.
We urge overseas investors to review the following key points under the new draft law:
- Liberalization of the investment regime
- Restricted sectors
- National security review
- Variable-Interest entity (VIE) structure
- Regular reporting requirement
For more information, please see our full briefing.