China no longer classifies foreign-funded enterprises according to Sino-foreign joint ventures and cooperation
Source: State Council
Date: December 21, 2020
In order to implement the “Foreign Investment Law”, the State Council recently issued the State Council Order No. 732, promulgating the “Decision of the State Council on Amending and Repealing Certain Administrative Regulations”, and sorting out administrative regulations that are inconsistent with the “Foreign Investment Law”, including 22 administrative regulations. Part of the clauses of will be revised and will come into effect on November 29, 2020.
The main changes include:
- In accordance with the actual situation that the establishment of foreign-invested enterprises will no longer be approved after the implementation of the “Foreign Investment Law”, the contents of the five administrative regulations concerning the establishment of foreign-invested enterprises including the “Regulations on the Administration of Commercial Performances” shall be revised.
- Implement the provisions of the “Foreign Investment Law” on the implementation of the pre-admission national treatment plus negative list management system for foreign investment, and the “Regulations on Civil Aircraft Nationality Registration” and other six administrative regulations and “Special Management Measures for Foreign Investment Access” (Negative List) (2020 Edition)” inconsistent terms shall be revised.
- After the “Foreign Investment Law” is implemented, foreign-invested enterprises will no longer be classified as “Sino-foreign joint ventures”, “Sino-foreign contractual joint ventures” or “foreign-funded enterprises”, and their organizational structures and organizational forms shall be uniformly applied to the “Company Law” “, the “Partnership Law” and other laws. Accordingly, the provisions concerning the classification of foreign-invested enterprises in 13 administrative regulations including the “Regulations on Travel Agencies” have been revised accordingly.
- The individual provisions of the 4 administrative regulations including the “Regulations on the Administration of Commercial Performances” concerning the implementation of the reform of the State Council’s “Decentralization, Management and Services” have been revised together to cancel relevant approval items and simplify the approval process.
In addition, after the implementation of the “Foreign Investment Law”, foreign investors will uniformly apply the “Foreign Investment Law”, “Partnership Law” and laws and administrative regulations related to commercial registration when establishing partnership enterprises in China, and there is no longer a need to retain separate management methods. Therefore, it was decided to abolish the “Administrative Measures for the Establishment of Partnership Enterprises in China by Foreign Enterprises or Individuals” (promulgated by Order No. 567 of the State Council of the People’s Republic of China on November 25, 2009).
Remarks: For the extensive collection of relevant information for reference.