Understanding China's Special Administrative Measures (Negative List) for Foreign Investment Access
- China Legal Focus
- Mar 6
- 3 min read
Explanation
The Special Administrative Measures (Negative List) for Foreign Investment Access (the “Negative List for Foreign Investment Access”) set out on a unified basis the requirements on equity requirements and senior executives and other special administrative measures for foreign investment access. Fields not covered by the Negative List for Foreign Investment Access shall be subject to administration under the principle of equal treatment for domestic and foreign investments. Domestic and foreign investors shall uniformly apply the relevant provisions of the Negative List for Market Access.
No overseas investor may engage in investment and business activities as individually owned business, an investor in a sole proprietorship enterprise, or a member of a farmers’ cooperative.
Foreign-invested enterprises investing in China shall comply with relevant provisions of the Negative List for Foreign Investment Access.
In the course of performance of duties pursuant to the law, the relevant authorities shall not process relevant matters including application for a permit, enterprise registration, etc. for proposed investments by overseas investors in fields mentioned in the Negative List for Foreign Investment Access that does not comply with the provisions of the Negative List for Foreign Investment Access; where approval for a fixed asset investment project is involved, the relevant approval matters shall not be processed. No foreign-invested partnership business may be established in any investment field subject to equity requirements.
Upon review by the competent authorities of the State Council and approval by the State Council, the provisions of the Negative List for Foreign Investment Access concerning a relevant field may not apply to specific foreign investment.
Domestic enterprises engaged in businesses in fields prohibited from investment mentioned in the Negative List for Foreign Investment Access shall be examined and approved by the relevant competent authorities of the state for issuing shares abroad and going public for trading. Overseas investors shall not participate in the operation and management of the enterprises, and their equity ratio shall be governed by reference to the relevant regulations on the management of domestic securities investment of overseas investors.
Where domestic companies, enterprises, or natural persons merge or acquire with or acquire their affiliated domestic companies through a company legally established or controlled overseas thereby, the relevant provisions on foreign investment, overseas investment, foreign exchange administration, etc. shall apply.
For administrative approval, eligibility requirements, national security, or other relevant measures concerning cultural, financial, or other fields not listed in the Negative List for Foreign Investment Access, existing regulations shall apply.
Where the Mainland and Hong Kong Closer Economic Partnership Arrangement and its subsequent agreements, the Mainland and Macau Closer Economic Partnership Arrangement and its subsequent agreements, the Cross-Straits Economic Cooperation Framework Agreement and its subsequent agreements, or the international treaties or agreements to which China accedes or is a signatory contain more preferential provisions on access treatment for overseas investors, the relevant provisions may apply. If more preferential opening-up measures are offered to eligible investors in special economic zones, such as pilot free trade zones, the relevant provisions shall apply.
The Negative List for Foreign Investment Access shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in concert with the relevant authorities.
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