The Approval and Filing Procedure for Foreign Investment in China

4 minute read

China’s updated Foreign Investment law came into effect on January 1st of this year. The new law intent to accelerate market reforms and eradicate the previous inconsistency. Before the Foreign Investment law was implemented, the foreign investment filing and approval procedures were before SAMR (State Administration for Market Regulation) and MOFCOM (Ministry of Commerce).

Since January 1, 2020, MOFCOM will no longer examine and approve application made by foreign-invested enterprises involved in the Negative List, and enterprises involved in the permitted and encouraged list will no longer need to be filed at MOFCOM.

Whether being involved in the Negative List or not, foreign investors or foreign-invested enterprises shall submit investment information to MOFCOM via enterprise registration systems and the National Enterprise Credit Information Publicity System.

SAMR oversees corporate registration.

Incorporation documents

The following documents need to be submitted to SAMR before the incorporation of a WFOE:

• The Articles of Association, which define the organization and corporate governance of the company;
• Incorporation certificate of the shareholder
• Shareholder’s decision or resolution on incorporation of a WFOE
• Appointment letter for director(s)
• Appointment letter for supervisor
• Appointment letter for general manager
• Application forms
• Any other documents required by SAMR

For a joint venture company, the above-mentioned documents need to be completed with the Joint Venture Contract for incorporation.

Issuance of the business license

Once the SAMR has issued the business license, the preliminary investment information report needs to be submitted via online registration systems. The FIE needs to be formally established under PRC law before it can start to operate its activities.

Environmental approval

For certain specific types of FIEs in manufacturing business, the business needs to establish an environmental impact assessment report (EIA) . The classification of the manufacturing projects between having a “significant”, “moderate”, or “small” impact on the environment. The construction of factory and process of manufacturing will be assessed. Such evaluation should be carried out by qualified institutions approved by the Chinese authorities. The report will be submitted to and approved by the Environmental Protection Bureau.

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