10 April 2015
Further to our briefing titled "An Overview of the Latest Changes to China's 2014 Industry Catalogue for Foreign Investment" issued in December 2014 which discusses the 2014 consultation draft of the Catalogue for the Guidance of Foreign Investment, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) promulgated the final version of Catalogue (2015 Catalogue) on 10 March 2015, which will take effect as from 10 April 2015.
In line with changing policies and market needs, China has been modifying the content of the Catalogue from time to time. Prior to the promulgation of the 2015 Catalogue, China has issued the 2014 consultation draft to collect public comments on the draft changes to the last version of the Catalogue. The final content of the 2015 Catalogue now retains most of the changes made in the 2014 consultation draft, hence our observations in the December 2014 briefing remains valid. For ease of your reference, this briefing serves as a complete update of the key changes to China's foreign investment policy under the 2015 Catalogue.
By way of background, the 2015 Catalogue is the primary source of guidance for a foreign investor to ascertain whether its potential investment in an industry in China is possible, and if so, what level of government approval is required and whether any restriction applies, such as limitation on the percentage of foreign shareholding. Similar to the past versions of the Catalogue, the 2015 Catalogue lists a number of industries and classifies them according to whether foreign investment is encouraged, restricted or prohibited. An industry which is not expressly listed is deemed to be one in which foreign investment is permitted.