Corporate China Commentary 3-2016
One More Step to the Negative List Scheme
On September 3rd, 2016, the National People’s Congress Standing Committees of the People’s Republic of China (the “PRC”) adopted the Decision on Revising Four Laws Including the Law of the People's Republic of China on Wholly Foreign-owned Enterprises (the “Decision”), which will take effect on October 1st, 2016.
Currently, except for enterprises registered in the free trade zones1, the foreign-invested enterprises and those enterprises invested by Taiwanese (“FIEs”) shall obtain prior approval from the Ministry of Commerce (“MOC”) and its local counterparts for their incorporation and major changes. However, upon the effectiveness of the Decision, after the special administrative measures is announced by the State (the “National Negative List”), the FIEs not in the National Negative List shall adopt record-filing procedure for its incorporation and changes, while for the FIEs in the National Negative List, current administrative approval procedure will still apply.