Legislation roundup: Foreign Investment Law, foreign banks and import tax
December 27, 2019 | BY
Susan MokSupreme People's Court allows flexibility in foreign investment contract disputes, foreign banks are given more specific expanded business requirements and import of technical equipment enjoys tax breaks.
FDI
Supreme People's Court, Interpretation on Several Issues Concerning the Application of the <PRC Foreign Investment Law>
If a party claims that an investment contract arising in a sector not covered by the Special Administrative Measures for Foreign Investment Access (Negative List) is invalid or did not enter into effect on the grounds that it was not approved by, or registered with, the relevant competent administrative department, the people's court will reject such claim.
Even if a foreign investor invests in a sector in which investment is specified as being restricted by the Negative List, so long as the concerned party takes the necessary corrective measures before the people's court renders an effective judgment or ruling, the investment contract may nonetheless be found to be valid.
See the full translation.
Further reading
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Banking
China Banking and Insurance Regulatory Commission, Implementing Rules for the PRC Regulations for the Administration of Foreign-Invested Banks
The Rules set forth the conditions that are required to be met when simultaneously establishing subsidiaries and branches of foreign-invested banks, and add to the corresponding regulatory requirements.
The Rules add a provision that when a branch of a foreign bank engages in deposit business, it is required to fully disclose to customers information on deposit insurance.
Further reading
Tax
Ministry of Finance, Ministry of Industry and Information Technology, General Administration of Customs, State Administration of Taxation and National Energy Administration, Circular on Revising the Catalogue of Import Tax Policies for Major Technical Equipment
Effective from January 1, 2020, qualified domestic enterprises that genuinely need to import the goods listed in Annex 2 to produce the equipment or products listed in Annex 1 attached to the Circular shall be exempt from customs duties and import stage value-added tax.
Solar cell production equipment, key equipment for integrated circuits, digital medical imaging equipment, dedicated bioengineering, medical production equipment, etc. are eligible for the relevant tax breaks.
Further reading
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