Ministry Of Commerce Further Decentralization Of Examination And Approval Of Foreign Investment

China's Ministry of Commerce recently issued a notice to further expand the authority of foreign commercial examination and approval of local commercial authorities and national economic and technological development zones, and delegate authority to examine and approve foreign investment in holding investment companies.

The notice clearly stated that the establishment of a domestic branch of a foreign-funded enterprise (except for the specific requirements for examination and approval) shall be replaced by the filing management, and the enterprise shall directly go through the filing procedures with the local commercial department of the registration place.

According to the circular, the establishment, capital increase, contract / articles of association, and alteration of the foreign-funded enterprises (including joint stock companies), which are encouraged by the Ministry of Commerce and do not require comprehensive national balance, are examined by the provincial commerce department and the national economic and Technological Development Zone.

If foreign investors and foreign investment enterprises merge and purchase domestic enterprises, the amount of encouraged and permitted M & A pactions is less than US $100 million and below, and the amount of restricted pactions is less than US $50 million and below. The competent local commerce authorities, together with relevant departments of industry and commerce, taxation, foreign exchange and other related departments, shall examine and verify according to relevant laws and regulations and regulations on the acquisition of domestic enterprises by foreign investors.

The circular clearly states that foreign investors invest in the establishment of a registered capital of 100 million US dollars and below the investment company and its change (except for a single increase of more than 100 million US dollars), and the provincial commerce department responsible for approval is registered by the investment company.

The circular pointed out that investment scope of investment companies should not involve restrictions and prohibition of foreign investment and macro-control industries.

If the scope of investment is in the permitted industries involving foreign investment special provisions, the competent departments of commerce at the provincial level shall obtain the consent of the competent departments of the state industry in accordance with the relevant provisions.

According to the circular, the proportion of foreign investment invested by enterprises invested by investment companies or those jointly invested with other investors, such as foreign investors (referring to investment companies and other overseas investors) is no less than 25% of the registered capital of the invested enterprises, and they can enjoy the treatment of foreign-invested enterprises.

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