Legislation roundup: Foreign Investment Catalogue, acquisition loans and Legislation Law

Foreign Investment

National Development and Reform Commission and Ministry of Commerce, Foreign Investment Industrial Guidance Catalogue (Revised in 2015)
国家发展和改革委员会、商务部外商投资产业指导目录 (2015年修订)

In the amended Catalogue, items in the restricted category have been reduced by 41. Items with “restricted to equity and cooperative joint ventures” have been reduced from 43 in the 2011 version to 15, and those with “the Chinese party shall hold a controlling interest” have been reduced from 44 in the 2011 version to 35. The requirement in respect of the shareholding percentage for projects in iron and steel, ethylene, papermaking, lifting machinery, equipment for electricity transmission and transformation, famous and fine white spirits, etc. has been abolished. A series of relaxation measures have been put forward for sectors such as trade and logistics, e-commerce, transportation, social services, finance and culture.

See the digest for more details.

Further reading
Foreign Investment Industrial Guidance Catalogue (Amendment Draft)
Foreign Investment Industrial Guidance Catalogue (Amended in 2011)
FDI changes draw praise, spark confusion
PRC Foreign Investment Law (Draft for Comments)
China revamps foreign investment rules, tackles VIEs


Financing

China Banking Regulatory Commission, Guidelines for Management of the Risks Associated with Acquisition Loans Extended by Commercial Banks
中国银行业监督管理委员会商业银行并购贷款风险管理指引

The Guidelines extend the term for acquisition loans from five years to seven years; increase the acquisition loan percentage, increasing the percentage of the acquisition transaction amount they account for from 50% to 60%; and convert the mandatory provisions addressing the provision of security into provisions of principles, and remove the requirement that conditions for the provision of security be more stringent than those for other types of loans.

See the digest for more details.

Further reading
Guidelines for Risk Management by Commercial Banks of Loans Extended for Mergers and Acquisitions, 2009
Measures for the Administration of Financial Consultancy Services for Mergers, Acquisitions and Reorganisations of Listed Companies


Legal system

PRC Legislation Law (Revised)
中华人民共和国立法法 (修正)

The amended Legislation Law expressly specifies that “basic tax systems, such as those for the creation of taxes, the determination of tax rates and the administration of the levying of taxes” may only be provided for in laws.

See the digest for more details.

Further reading
PRC Enterprise Income Tax Law
Implementing Regulations for PRC Enterprise Income Tax Law