Measures for the Reporting of Foreign Investment Information

(Promulgated by the Ministry of Commerce and the State Administration for Market Regulation on December 30, 2019 and effective as of January 1, 2020.)

Order of MOFCOM and SAMR [2019] No.2

Part One: General Provisions

Article 1:   These Measures have been formulated pursuant to the PRC Foreign Investment Law and the Implementing Regulations for the PRC Foreign Investment Law in order to further expand the opening to the outside world, enhance the level of promotion, protection and administration of foreign investment, improve foreign investment policy measures and improve the business environment.

Article 2:        Where a foreign investor directly or indirectly conducts investment activities in China, the foreign investor or the foreign-invested enterprise shall submit investment information to the department in charge of commerce in accordance herewith.

Article 3:   The Ministry of Commerce is charged with the overall planning and guidance of foreign investment information reporting work nationwide.

The departments in charge of commerce of local people's governments at the county level and above and the relevant authorities of pilot free trade zones and state-level economic and technology development zones shall be responsible for foreign investment information reporting work in their regions.

Article 4:   A foreign investor or foreign-invested enterprise shall submit investment information to the department in charge of commerce through the enterprise registration system and national enterprise credit information publication system.

The market regulation department shall forward the aforementioned investment information submitted by a foreign investor or foreign-invested enterprise to the department in charge of commerce in a timely manner.

The Ministry of Commerce shall establish a foreign investment information reporting system, and accept and process in a timely manner investment information forwarded by the market regulation department, information shared among departments and other such information.

Article 5:   The State Administration for Market Regulation (SAMR) shall plan, on an overall basis, and guide the establishment of the national enterprise registration system and national enterprise credit information publication system, so as to ensure the implementation of foreign investment information reporting.

Article 6:   The departments in charge of commerce and market regulation departments at each level shall duly carry out the convergence of work. A department in charge of commerce shall provide specialized guidance for the submission of investment information by foreign investors and foreign-invested enterprises.

Article 7:   A foreign investor or foreign-invested enterprise shall submit investment information in a timely manner, observe the principles of truthfulness, accuracy and completeness, and may not carry out false or misleading reporting or have material omissions.

Part Two: Reporting Subject, Substance and Method

Article 8:   A foreign investor or foreign-invested enterprise shall submit investment information by means of submitting an initial report, amendment report, deregistration report, annual report, etc. in accordance herewith.

Article 9:   A foreign investor establishing a foreign-invested enterprise in China shall submit an initial report through the enterprise registration system when carrying out registration of the establishment of such foreign-invested enterprise.

A foreign investor that carries out an equity acquisition of a domestic enterprise that is not a foreign-invested enterprise shall submit an initial report through the enterprise registration system when carrying out a registration amendment of the acquired enterprise.

Article 10:   When submitting an initial report, a foreign investor shall submit information such as the enterprise's basic particulars, information on its investors and its de facto controller and investment transaction information.

Article 11:   In the event of a change in the information in an initial report and the same involves a registration (record filing) amendment of the enterprise, the foreign-invested enterprise shall submit an amendment report through the enterprise registration system when carrying out a registration (record filing) amendment of the enterprise.

Where a registration (record filing) amendment of the enterprise is not involved, the foreign-invested enterprise shall submit an amendment report through the enterprise registration system within 20 working days after the occurrence of the change. If the enterprise passes a resolution on the change in accordance with its articles of association, the date on which the resolution is passed shall be the date on which the change occurs; or if laws or regulations require otherwise on the conditions for the entry into effect of a change, the date on which the relevant requirements are satisfied shall be the date on which the change occurs.

With respect to a listed company or a company listed on the National Equities Exchange and Quotations invested in by a foreign investor, a report on the change in the information of the investor and the shares held by it needs only be made where the change in the shareholding percentage of the foreign investor exceeds 5% in the aggregate or results in a change in the foreign party's controlling position or relative controlling position.

Article 12:   When submitting an amendment report, a foreign-invested enterprise shall submit information on the changes in its basic particulars, the information on its investors and its de facto controller, the information on the investment transaction, etc.

Article 13:   A foreign-invested enterprise that deregisters or is converted into a Chinese-invested enterprise shall be deemed to have submitted a deregistration report upon the carrying out of enterprise deregistration or a registration amendment of the enterprise, and the relevant information shall be forwarded to the department in charge of commerce by the market regulation department. The foreign-invested enterprise shall not be required to separately submit the same.

Article 14:   Each year, between January 1 and June 30, a foreign-invested enterprise shall submit its annual report for the previous year through the national enterprise credit information publication system.

A foreign-invested enterprise established in a certain year shall begin submission of its annual reports from the subsequent year.

Article 15:   A foreign-invested enterprise submitting an annual report shall submit information such as its basic particulars, information on its investors and de facto controller, and information on its operations, assets and liabilities. If special administrative measures for foreign investment access are involved, information on the securing of the relevant industry permissions shall additionally be submitted.

Article 16:   The specific substance of initial reports, change reports and annual reports shall be determined based on the principle of genuine necessity and in light of actual foreign investment circumstances and relevant provisions on enterprise registration and publication of enterprise information and be issued by the Ministry of Commerce in the form of an announcement.

Part Three: Sharing, Publication and Correction of Information

Article 17:   A department in charge of commerce and relevant departments shall, as required for the information reporting work, establish a foreign investment information sharing mechanism.

Unless otherwise provided in laws or administrative regulations, foreign investment information obtained by a relevant department in the course of performing its duties shall be shared with the department in charge of commerce in a timely manner.

Article 18:   If, pursuant to the Tentative Regulations for the Publication of the Information of Enterprises, information submitted by a foreign investor or foreign-invested enterprise is required to be published to the public or the foreign investor or foreign-invested enterprise consents to such a publication, such publication to the public shall be carried out through the national enterprise credit information publication system and foreign investment information reporting system.

Article 19:   If a foreign investor or foreign-invested enterprise becomes aware that it did not report, erroneously reported or failed to report relevant investment information, it shall report or correct the same in a timely manner. The reporting of missing, or correction of, information required to be disclosed in an annual report as enumerated in the Tentative Regulations for the Publication of the Information of Enterprises by a foreign-invested enterprise shall comply with relevant provisions of such Regulations.

If a department in charge of commerce discovers that a foreign investor or foreign-invested enterprise has not reported, erroneously reported or failed to report information, it shall notify such foreign investor or foreign-invested enterprise to report or correct the same within 20 working days.

If a correction involves a matter that has been disclosed, both the original and corrected information shall be disclosed.

Part Four: Oversight

Article 20:   A department in charge of commerce shall conduct monitoring inspections of the compliance herewith by foreign investors and foreign-invested enterprises.

A department in charge of commerce may, together with relevant departments, conduct a monitoring inspection by means of a random inspection, inspection conducted on the basis of a tip, inspection conducted on the basis of the advice of, or information reflected by, a relevant department or judicial authority or inspection launched ex officio.

Article 21:   If a department in charge of commerce is to conduct monitoring inspections of the performance by foreign investors and foreign-invested enterprises of their information reporting obligations by means of random inspections, it shall pick the inspection targets at random and randomly appoint the law enforcement inspectors. The matters that are the subject of the random inspections and the outcome of the inspections and handling shall be published through the publication platform of the foreign investment information reporting system in a timely manner.

If a citizen, legal person or other organization discovers that a foreign investor or foreign-invested enterprise has committed a violation hereof, he/she/it may report the same to the department in charge of commerce. Where such a report is made in writing, has a specific party being reported and provides the relevant facts and evidence, the department in charge of commerce shall deal with the matter in accordance with the law in a timely manner after receipt of the report.

If another relevant department or judicial authority discovers, in the course of performing its duties, that a foreign investor or foreign-invested enterprise has committed a violation hereof, it may advise the department in charge of commerce to conduct a monitoring inspection, and the department in charge of commerce shall deal with the matter in accordance with the law in a timely manner after receipt of the relevant advice.

With respect to a foreign investor or foreign-invested enterprise that fails to carry out reporting in accordance herewith, or has a record of having made an untruthful report, failing to give its cooperation in a monitoring inspection or refusing to perform an administrative penalty decision rendered by the department in charge of commerce, the department in charge of commerce may launch an inspection thereof ex officio.

Article 22:   A department in charge of commerce may conduct a monitoring inspection by means of an onsite check, written inspection, etc. As required, it may use information obtained from other departments to verify whether the investment information submitted by a foreign investor or foreign-invested enterprise is true, accurate, complete and timely. The department in charge of commerce may, in accordance with the law, review, or require the party being inspected to provide, relevant materials, and the party being inspected shall cooperate in the inspection and provide truthful materials.

Article 23:   In conducting a monitoring inspection, the department in charge of commerce may not obstruct the normal production and business activities of the party being inspected, accept property or services offered by the party being inspected or seek other illegal benefits.

Article 24:   A department in charge of commerce or market regulation department shall protect, in accordance with the law, the trade secrets of foreign investors and foreign-invested enterprises to which it is privy in the course of performing its duties.

Part Five: Legal Liability

Article 25:   If a foreign investor or foreign-invested enterprise fails to submit investment information in accordance with the requirements hereof and fails to report or correct the same in accordance with Article 19 hereof after notification from the department in charge of commerce, the department in charge of commerce shall order it to rectify the matter within 20 working days. If it fails to do so within the specified period of time, it shall be fined not less than Rmb100,000 and not more than Rmb300,000. If it fails to do so within the specified period of time and any of the following circumstances applies, it shall be fined not less than Rmb300,000 and not more than Rmb500,000:

(1)   the foreign investor or foreign-invested enterprise deliberately avoided performing its information reporting obligation or, when carrying out information reporting, it concealed the true circumstances, or provided misleading or false information;

(2)   the foreign investor or foreign-invested enterprise made an erroneous submission of key information, such as the industry to which it belongs, whether special administrative measures for foreign investment access are involved, its investors and de facto controller, etc.;

(3)   where the foreign investor or foreign-invested enterprise has been imposed administrative penalties for failure to submit investment information in accordance with the requirements hereof, it again violates relevant requirements hereof within two years; or

(4)   another serious circumstance as determined by the department in charge of commerce applies.

Article 26:   Relevant information on the failure by a foreign investor or foreign-invested enterprise to perform its information reporting obligation in accordance with the law learned by the department in charge of commerce in the course of a monitoring inspection shall be recorded in the foreign investment information reporting system, and credit oversight shall be improved in accordance with state provisions on the development of the credit system.

If a foreign investor or foreign-invested enterprise is imposed administrative penalties by the department in charge of commerce for breaching its information reporting obligation, the department in charge of commerce may publish the relevant circumstances on the publication platform of the foreign investment information reporting system and, in accordance with relevant state provisions, enter the same into the credit information system.

The department in charge of commerce may share relevant information on the performance by foreign investors and foreign-invested enterprises of their information reporting obligations and the attendant penalties incurred by them with the market regulation, foreign exchange, customs, tax and other such relevant departments.

Article 27:   If a foreign investor or foreign-invested enterprise deems that relevant information recorded on the publication platform of the foreign investment information reporting system is incomplete or contains errors, it may provide the relevant supporting documentation and apply to the department in charge of commerce for correction thereof. If the same is found to be true after a check, the information shall be corrected.

If a foreign investor or foreign-invested enterprise does not commit a further breach of its information reporting obligation within one year after rectifying a violation and performing the relevant obligations, it may apply to the department in charge of commerce to have the relevant information and record removed from the publication platform of the foreign investment information reporting system. If the same is found to be true after a check, the information and record shall be removed.

Part Six: Supplementary Provisions

Article 28:   Where a foreign-invested enterprise invests in (including a multi-level investment) and establishes an enterprise in China, the market regulation department shall, after such enterprise carries out registration/record filing with, or submits annual report information to, it, forward the relevant information to the department in charge of commerce. The aforementioned enterprise shall not be required to separately submit the same.

Article 29:   Enterprises invested in and established in China by companies with an investment nature, venture capital firms and partnerships mainly engaging in investment established with foreign investment shall submit investment information with reference to Part Two hereof.

Article 30:   For foreign investments that do not take the form of an enterprise, the foreign investor shall submit investment information with reference to Part Two hereof, with the exception of relevant information that is available through inter-department information sharing.

Article 31:   Where a law or a set of administrative regulations specifies that the permission of the competent industry department is required before registration of the establishment of, or registration amendment or deregistration of an enterprise, a foreign investor or foreign-invested enterprise shall submit the relevant approval document to the market regulation department when applying for registration.

Article 32:   These Measures shall apply to investments by foreign investors in financial industries such as the banking industry, securities industry and insurance industry in China.

Article 33:   For investments by investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan and by Chinese citizens who are permanently resident abroad, investment information shall be submitted with reference hereto.

Article 34:   The Ministry of Commerce and the State Administration for Market Regulation are responsible for the interpretation hereof.

Article 35:   These Measures shall be effective as of January 1, 2020. The Tentative Measures for the Administration of the Record Filing of the Establishment of, and Changes in, Foreign-invested Enterprises shall be repealed simultaneously.