Haworth & Lexon Law Newsletter

( Corporate and Investment )

??Haworth & Lexon Law Newsletter?? (Corporate and Investment) is issued every month, mainly introducing the legal change in the fields of corporate, investment with necessary comment. All the comments do not mean the legal opinion of our firm and the firm does not have any legal liability for such comment. Haworth & Lexon Law Office has rich experience in the fields of corporate and investment. If you have any queries on the above legal matters, we are happy to provide you with our advice. Please contact Mr. Chambers Yang, the Attorney and Partner of the firm at:Tel: 8621-6887 9696 Fax: 8621-6887 8766 Email: chambers@hllawyers.com

New Provisions on Investment at Home and Abroad

The State Council, National Development and Reform Commission (NDRC), Ministry of Commerce and the Hong Kong and Macau Affairs Office of the State Council promulgated Decision on Reform of Investment System, Provisional Measures on Verification and Approval of Projects Invested by Enterprise, Provisional Measures for Administration of Verification and Approval of Foreign Invested Projects, Provisional Measures for Administration of Verification and Approval of Invested Projects Abroad, Provisions on the Issues Concerning Approval for Investing and Establishing Enterprises Abroad, and Provisions on the Issues Concerning Approval for Mainland Enterprises' Investing and Establishing Enterprises in Hong Kong and Macau SAR respectively since July 2004. All these regulations and measures make an obvious change to the former system of investment at home and abroad.

1.For the projects not with government investment, the examination and approval system is replaced by the verification and approval system and record system.

2. The local government has the authority to approve those projects whose total investment is below 100 million US dollars for encouraged category or permitted category, or below 50 million US dollars for restricted category.

3. According to NDRC regulations, foreign investment enterprises within the above amount should first get NDRC's approval for the establishment, unless the local government has the different regulations. However, it's still not clear how to implement in practice.

4. Furthermore, foreign investors shall also first get NDRC's verification and approval for the M&A of local enterprises, unless the local government has the different regulations. But it's not clear how to make it consistent with the M&A regulations promulgated by Ministry of Commerce and other authorities in April 2003.

5. The enterprises just need to get the approval of provincial commerce department if they invest in the 135 countries listed by Ministry of Commerce, and the enterprises decide for themselves on the feasibilities from the economic and technical aspects. The concerned authority should decide whether approve or not within 15 working days.

6. Foreign invested enterprises can also invest and establish enterprises abroad.

7. If there are no local regulations, overseas investment project, including the individual investment, shall be approved by provincial development and reform department according to its regulations.