The State Intends To Fully Open Access To Foreign Capital: The Examination And Approval System Has Been Changed To The Reporting System.

The Sino foreign joint ventures law and the early stage of reform and opening up.

"And" Sino foreign cooperative enterprise law "(hereinafter referred to as the three law of foreign investment) has laid the legal foundation for China's use of foreign capital, and has made a significant contribution to the great historical process of China's reform and opening up.

The foreign investment legal system, which takes the three foreign investment as the core, plays a decisive role in China's active and effective use of foreign capital and promoting the development of the national economy.

Over the years, China's absorption of foreign investment has ranked second in the world and the first in developing countries.

From the initial introduction of capital, technology, management experience and export channels to the development of modern service formats, new business philosophy and high-end talents, foreign-invested enterprises have become an important force in promoting China's economic and social development.

At present, China has entered a decisive stage of building a well-off society in an all-round way. Reform has entered a critical stage and a deepwater area. Opening up is facing new situations and new tasks.

The current three foreign investment law has been unable to meet the needs of deepening the reform and opening wider to the outside world.

First, the management system of case by case examination and approval established by the three foreign investment law has been unable to meet the needs of building a new open economic system, is not conducive to stimulating market vitality and changing government functions; two, there are duplication and even conflicts in the three foreign investment laws, such as the form of enterprise organization and business activities, and the relevant laws such as the company law. Three, the important systems such as foreign mergers and acquisitions, national security review and so on need to be incorporated into the basic laws of foreign investment and further improved.

In the third Plenary Session of the 18th CPC Central Committee, the party put forward the idea of "building a new system of open economy", "unifying domestic and foreign capital laws and regulations, maintaining stable, pparent and predictable foreign investment policies", "reforming the examination and approval system for foreign-related investment", "exploring the management mode of national treatment plus negative list" for foreign investment implementation, and in the fourth Plenary Session of the 18th CPC Central Committee, the party called for "deepening the reform and opening up to the outside world, perfecting the system of foreign related laws and regulations, and promoting the construction of a new open economic system".

This has pointed out the direction for us to carry out the revision of the three law of foreign investment.

In order to implement the spirit of the third and fourth plenary session of the eighteen Central Committee of the party, according to the legislative plan of the Standing Committee of the twelve National People's Congress and the legislative work plan of the State Council in 2014, the Ministry of Commerce launched the revision of the Chinese Foreign Joint Ventures Law, the foreign investment enterprise law and the Sino foreign cooperative enterprise law, and formed the "foreign investment law of the people's Republic of China (Draft for draft)" (hereinafter referred to as the draft for solicitation).

I. guiding ideology and basic principles

The guiding ideology for drafting the draft is "taking the party" as the guiding principle.

Guided by the spirit of the eighteen Third Plenary Session of the Third Plenary Session of the third Central Committee and the Fourth Plenary Session of the Central Committee of the third Central Committee and the Fourth Plenary Session of the Third Plenary Session of the Central Committee of the third Central Committee and the Fourth Plenary Session of the Third Plenary Session of the Central Committee of the third Central Committee and the Fourth Plenary Session of the third Central Committee of the CPC, we must adhere to the requirements of the new system of open economy, adhere to the reform direction of marketization, rule of law and internationalization, innovate the management system of foreign investment, and formulate a foreign investment basic law that is consistent with the economic development stage and basic national conditions of China, and meets the requirements of international common rules, so as to create a more stable, pparent and predictable legal environment for foreign investment.

We believe that the foreign investment law should be positioned as a law for deepening the reform of the system, expanding the law of opening to the outside world, promoting the law of foreign investment, and regulating the law of foreign investment management.

To achieve these objectives, we have adhered to the following principles in drafting:

First, we should clarify the basic position of law.

The foreign investment law is located in a unified basic law governing and promoting foreign investment, and no longer regards the organizational form of enterprises as the object of regulation.

The two is to innovate the management mode of foreign capital.

We should abolish the current system of examining and approving foreign investment in a case by case basis, adopt foreign investment management methods before admission to national treatment and negative list, reduce foreign capital restrictive measures, relax foreign investment access and strengthen information reporting.

Three, we should improve the management system of foreign investment.

To sum up the practice of foreign capital management over the past thirty years, the important systems of foreign capital acquisition and national security review are incorporated into the foreign investment law and further improved.

The four is to pform the functions of the government.

From heavy ex ante examination and approval to providing public services and strengthening supervision afterwards, we should strengthen investment promotion and protection, supervision and inspection system while substantially eliminating administrative examination and approval.

Two, main contents

The draft is composed of 170 chapters, which are divided into 11 chapters, namely, general principles, foreign investors and foreign investment, access management, national security review, information reporting, investment promotion, etc.

Complaints, coordination, supervision, inspection, legal liability and supplementary provisions.

The main contents are as follows:

(1) definitions of foreign investors and foreign investment.

For foreign investors, the draft is defined by foreign investors according to the standards of registration, and the standard of "actual control" is introduced.

On the one hand, it is stipulated that domestic enterprises controlled by foreign investors should be treated as foreign investors. On the other hand, foreign investors are controlled by Chinese investors and their investments in China can be regarded as investment by Chinese investors.

For foreign investment, the "draft solicitation" stipulates not only green land investment, but also mergers and acquisitions, medium and long-term financing, acquisition of franchise for natural resources exploration and development or infrastructure construction, acquisition of real property rights, and control of domestic enterprises or the interests of domestic enterprises through contracts and trusts.

(two) access management system

The draft has abolished the case by case examination and approval system established by the three foreign investment laws, and designed a foreign investment access management system that is compatible with the national treatment plus negative list management mode before admission.

The competent foreign investment department only applies permission for investment in the field specified in the catalogue of special management measures, and the object of examination is no longer a contract or a charter, but a foreign investor and its investment behavior.

Under the negative list management mode, the vast majority of foreign investment will no longer be examined and approved.

At the same time, it is stipulated that foreign investors' investment in China, whether or not they belong to the areas specified in the catalogue of special administrative measures, need to fulfill their reporting obligations.

(three) national security review system.

In order to prevent foreign investment from causing or possibly causing harm to national security, the draft for consultation has set up a special chapter to stipulate the national security review system for foreign investment.

In view of the shortcomings of the current national security review system, such as low level of effectiveness, imperfect system, etc., on the basis of the notice of the general office of the State Council on the establishment of a security review system for foreign investors to acquire and merge domestic enterprises, and fully drawing on the practices of the countries concerned, the draft for consultation has further improved the review factors and review procedures of the national security review, defined the measures to be taken to eliminate the potential dangers of national security, and stipulated that the national security review decision shall not bring administrative reconsideration and administrative litigation.

(four) information reporting system.

In order to grasp the situation of foreign investment and the operation of foreign investment enterprises in a timely, accurate and comprehensive manner, the "draft for consultation" stipulates the foreign investment information reporting system.

Foreign investors or foreign investment enterprises should fulfill their duty of reporting information to foreign investment authorities in their investment and business activities, whether they belong to the areas specified in the catalogue of special administrative measures.

The report information must be true, accurate and complete, and there must be no false record, misleading statement or major omission.

The three categories of information reports differentiated from the draft (foreign investment report, foreign investment matters change report and periodic report) stipulate the contents and time limits of the corresponding reports.

(five) the investment promotion system.

Strengthening the government's role in investment promotion is a new trend in the current legislation and policies of foreign capital in the world.

In order to establish a sound investment promotion mechanism and raise the level of specialization in investment promotion, and improve the quality and level of utilizing foreign capital, the draft for investment has been standardized from investment promotion policies, investment promotion institutions and special economic regions.

(six) investment protection system.

In order to protect the legitimate rights and interests of foreign investors and their investments, the solicitation paper has comprehensively strengthened the protection system for foreign investors and their investments from aspects of collection, requisition, state compensation, pfer, pparency and intellectual property protection.

(seven) the system of handling complaints coordination.

The draft consultation stipulates the system of handling complaints coordination, and strengthens the coordination function of foreign investment complaints handling agencies to coordinate disputes between foreign investors, foreign investment enterprises and administrative organs, so as to effectively and effectively resolve foreign investment disputes.

(eight) supervision and inspection system.

It is a "top priority" for the new government to pform government functions in order to expand market access, reduce administrative examination and approval, and strengthen supervision afterwards.

The "draft for consultation" has comprehensively stipulated the supervision and inspection system from the aspects of supervision and inspection initiation, inspection methods, inspection contents and examination results.

At the same time, we need to establish a credit file system for foreign investors to enhance the sense of self-discipline of foreign investors and foreign investment enterprises.

(nine) legal liability system.

The draft law stipulates the system of legal liability, and specifies the administrative legal liability or criminal legal liability that should be undertaken in the field of prohibiting investment, investment without permission or violation of license conditions, investment in violation of the scope of information, violation of information reporting obligations, violation of national security review regulations and evasion of mandatory provisions of law.

Three. Notes on Several Issues

(1) pitional arrangements

After the entry into force of the foreign investment law, the three foreign investment laws will be abolished.

Since the foreign investment law will no longer regulate the organizational form and organizational structure of foreign investment enterprises, the "draft solicitation" stipulates that foreign investment enterprises, which are legally surviving before the entry into force of this law, should be adjusted in accordance with the company law and other laws and regulations within three years.

(two) treatment of overseas Chinese investors in Hong Kong, Macao and Taiwan

Since the reform and opening up, the investment of compatriots from Hong Kong, Macao and Taiwan and overseas Chinese has played an indispensable role in promoting the vigorous development of China's economy.

The draft solicitation stipulates that the investment of Hong Kong, Macao and Taiwan overseas investors should be applied in accordance with this law; the special treatment of investors from Hong Kong, Macao and Taiwan should be separately stipulated by the State Council.

(three) processing of protocol control

Foreign investment enterprises have been widely concerned about the issue of obtaining control rights of domestic enterprises through signing a series of agreements.

The draft will explicitly stipulate the agreement control as a form of foreign investment. This law will apply to the investment in the form of protocol control after the entry into force of this law.

What should be done before the entry into force of this Law in the form of agreement control? If, after the entry into force of this law, it is still prohibited or restricted in the field of foreign investment, how should we deal with it?