United States: China Reforms Its Registration System for Foreign Investment

Last Updated: October 15 2016
Article by Lester Ross and Tingting Liu

On October 8, the Ministry of Commerce ("MOFCOM") issued the Provisional Measures for Filing Administration of Establishment and Changes of Foreign-Invested Enterprises ("FIEs") ("Filing Administration Measures").1 The Filing Administration Measures are based on the Decision of the Standing Committee of the National People's Congress on the Revision of Four Laws Including the Law on Wholly Foreign-Owned Enterprises issued on September 3 ("Revision Decision).2 Together, the two documents simplify the procedures for establishment, amendment and termination for FIEs in industries other than those listed in the special entry administration measures (the "National Market Access Negative List"). We summarize below the key features of the Filing Administration Measures.

1. Scope of Filing Administration

Article 2 of the Filing Administration Measures provides that the filing administration applies to the establishment and changes of FIEs other than those that are subject to the special entry administration measures stipulated by the State, i.e., outside the National Market Access Negative List.

On October 8, the National Development and Reform Commission and MOFCOM jointly issued an announcement stipulating that the scope of the National Market Access Negative List consists of the Restricted and Prohibited categories specified in the Catalogue of Industries for Guiding Foreign Investment (2015 Revision) (the "Catalogue"),3 and industries specified in the Encouraged category in which equity or senior management-related requirements are imposed.4 Relevant existing regulations remain applicable to the establishment and change of enterprises incorporated by foreign parties through mergers and acquisitions across all industries.

Therefore, foreign investment in the Restricted and Prohibited categories in the Catalogue, as well as the Encouraged category with equity or senior management requirements, will continue to be subject to the approval and registration regime, regardless of investment amount or investment type (greenfield investment or M&A). The acquisition of domestic non-FIEs by foreign investors will continue to be subject to the Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors. Where listed companies are involved, the Measures for the Administration of Strategic Investment in Listed Companies by Foreign Investors apply. All other forms of foreign investment shall be subject to the simpler filing administration procedure.

2. Filing Administration Procedure

Article 5 of the Filing Administration Measures provides that for the establishment of an FIE which falls within the filing scope, after having obtained pre-approval of the name of the enterprise, application materials need to be submitted online either prior to the issuance of business license or within 30 days thereafter. Article 6 provides that the filing for changes after the FIE has been established needs to be carried out within 30 days after the occurrence of the change. Article 11 provides that filing authorities shall verify the registration application only for completeness and accuracy, and determine whether the application matters fall within the filing scope. If so, the filing authority is obligated to complete the filing procedure within three working days.

Fundamentally different from the previous approval and registration regime, filing administration does not require that the filing authority substantively review and examine the application materials, and the filing is no longer a pre-condition for undergoing other formalities, such as business license, bank account and tax registration.

3. Disclosure Requirement

Certain disclosure requirements under the Filing Administration Measures are more extensive than under the previous approval regime, which still applies to the Restricted and Prohibited categories of industries as well as some industries in the Encouraged category. For example, Articles 5 and 6, as well as the ancillary application forms, require the entry of information regarding the ultimate effective controllers of the FIE and its investors, and the territorial source of funds. "Control" is widely defined and includes direct or indirect de facto control through shareholding, contract, trust or other means.

In short, the Filing Administration Measures constitute a significant simplification of regulations governing foreign investment in those industries not subject to more extensive review. While the investment catalogue structure governing foreign investment is retained, the Filing Administration Measures extend the nationwide negative list administrative model already adopted in the four pilot free trade zones of Shanghai, Tianjin, Guangdong and Fujian.

The Filing Administration Measures do not, however, signify a narrowing of the negative list so foreign investors in many industries, including some of those that are most attractive to foreign investors, will continue to be subject to approval requirements. As such, China will continue to be pressed by major trading partners to offer a narrower negative list as a condition to conclusion of investment treaties

1 See  http://tfs.mofcom.gov.cn/article/bc/201610/20161001404965.shtml.

2 See  http://www.npc.gov.cn/npc/xinwen/2016-09/03/content_1996747.htm. The other three laws are Law on Sino-Foreign Equity Joint Ventures, Law on Sino-Foreign Co-Operative Enterprises, and Law on the Protection of Investment by Taiwanese Compatriots.

3 See  http://www.mofcom.gov.cn/article/b/c/201503/20150300911747.shtml.

4 See  http://www.mofcom.gov.cn/article/h/zongzhi/201610/20161001405285.shtml.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.