Clifford Chance

Clifford Chance Client Briefing-Uncertain future for VIE structures in China

30 January 2015

MOFCOM issued a consultation draft of the Foreign Investment Law 《中华人民共和国外国投资法（草案征求意见稿）》 (the "Consultation Draft") on 19 January 2015.  If passed into law, the draft would have some far-reaching implications on the foreign investment legal regime in the PRC.  For example, the Consultation Draft envisages a "negative list" concept (currently adopted in the Shanghai pilot free trade zone) – if a foreign investor proposes to invest in an underlying business which falls outside the "negative list", then the foreign invested enterprise can be established without MOFCOM approval, which is a radical change from the current regime for foreign investment.

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