Legislation roundup: Foreign Investment Law, industrial catalogue and food safety
November 08, 2019 | BY
Susan MokDraft of the implementing regulations for the Foreign Investment Law has addressed the VIE structure concerns, final industrial adjustment catalogue no longer eliminates virtual currency mining and food safety liability can be pursued down to the responsible persons.
FDI
Implementing Regulations for the PRC Foreign Investment Law (Draft for Comments)
For the purposes of Item (3) of the second paragraph of Article 2 of the Foreign Investment Law, the phrase "investment in a new project in China" means that a foreign investor invests in the construction of a specific project in China, but neither establishes a foreign-invested enterprise nor acquires shares, equity, share of property or other similar rights or interests in an enterprise in China.
Where a wholly-owned enterprise established outside China by a Chinese natural person, legal person or other organization makes an investment in China, it may, subject to the review of the relevant competent State Council department and the approval of the State Council, be exempted from the restrictions of the relevant special administrative measures for access of the Negative List for Foreign Investment Access.
The term "legal person or other organization" excludes foreign-invested enterprises.
If the organizational form, organizational structure, etc. of a foreign-invested enterprise established before the implementation of the Foreign Investment Law is inconsistent with the mandatory provisions of laws such as the PRC Company Law or the PRC Partnership Law, the state encourages it to carry out amendment procedures in accordance with the law within five years after the implementation of the Foreign Investment Law.
See the full translation.
Further reading
Economic Policy
National Development and Reform Commission, Catalogue for Guiding the Adjustment of the Industrial Structure (2019 Edition)
The four industries of human resource and human capital service industry, artificial intelligence, senior care and childcare services and housekeeping are newly added to the encouraged category. The fire safety industry is removed from the restricted category and the mining industry is newly added to the eliminated category.
The Catalogue no longer includes virtual currency mining in the eliminated category as suggested in its draft issued in April this year.
Further reading
Food Safety
State Council, Implementing Regulations for the PRC Food Safety Law
In addition to the imposition of penalties in accordance with the Food Safety Law, if a food producer, operator or other such entity commits an illegal act as specified in the Food Safety Law, the legal representative, principal person in charge, officer directly in charge and other directly responsible persons of the entity may be fined not less than the amount and not more than 10 times the amount of revenue he/she derived from the entity during the previous fiscal year.
Further reading
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