FIE reform scraps approval, streamlines regulation

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CLP Temp

While China's move to a filing regime benefits most foreign-invested enterprises, other approval requirements require careful attention

Since foreign investment in PRC companies became permitted in 1979, the Ministry of Commerce (MOFCOM) and its predecessors were the frontline regulators in approving the establishment of foreign-invested enterprises (FIEs). This regime has been profoundly transformed by the Decision on Revising Four Laws, Including the «PRC Wholly Foreign-owned Enterprise Law» (NPC Decision) adopted by the Standing Committee of the People's National Congress on September 3, 2016.

Since the NPC Decision came into effect on October 1, 2016, an FIE engaged in a business that is not subject to restrictions or “special administrative measures for access” does not require MOFCOM approval for its establishment or for subsequent changes. These non-restricted FIEs only need to record file with MOFCOM.

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