2009-5-18 18:30:38Ministry of Commerce: Measures for Overseas Invest
On March 16, 2009, the Ministry of Commerce of the People’s Republic of China (“PRC”) issued Order No. 5 [2009] on Measures for Overseas Investment Management (“Measures”). The Measures is consisted of 41 articles in 7 chapters, including General Provisions, Approval, Modification and Termination, Activity Disciplines on Overseas Investment, Administration and Service as well as Supplementary Articles.
According to the Ministry of Commerce, the Measures, guaiding Chinese enterprises to “go globle”, focuses on two issues: promote the facilitation of enterprises’ overseas investment, and promote the guideline service provided by the commerce administrations.
For facilitating overseas investment activities, the Measures, firstly, delegates the approval power of the Ministry of Commerce to provincial commerce administrations. The approval power of the Ministry of Commerce is narrowed to the investments to a country, which has not established a diplomatic relationship with China, or investments in a specific country or region speicified by the Ministry of Commerce in conjunction with the Ministry of Foreign Affairs and other relevant departments, investments with the amount of the Chinese party being USD 100 million or more, investment which involves the interests of multiple countries or regions, and setting up a special-purpose company overseas. And secondly, the Measures simplifies the approval procedures and the materials submitted by the investor enterprise, and shortens the approval duration. Most overseas investments could be approved and issued Certificate of Overseas Investment within 3 days by submitting “Application Form for Overseas Investment”. Thirdly, the Measures narrows the scope of investments which need opinions of the economic and trade counselor’s office of the embassy or consulate of PRC in the foreign country or region. For the investments which need such opininions as required in the Measures, it is the commerce administrations’ task to solicit the embassy of consulate of PRC in the invested country or region, which shall provide its opinion within 10 working days as of receiving the letter of request issued by the commerce administration.
According to the Measures, the commerce administrations would check and approve overseas investments mainly considering bilateral political and economic relations, economic security of our country, and China’s international duties. And the enterprise investor considers the viability of its investment activity.
Article 28 of the Measures specifies the guideline and service work of the Ministry of Commerce for Chinese enterprises’ overseas investments, including issuing Cooperation Country (Region) Guide in Overseas Investment and Industry Direction Guide in Overseas Investment, establishing bilateral intergovernmental mechanism to help settle problems for enterprise investors, and establishing an information service system to provide such important informtaion as statistics, investment opportunity introduction, investment barrier analysis, and industry alarm. Moreover, the Ministry of Commerce will establish an overseas administration system online so that the enterprise investor may conveniently submit its application and obtain the approval certificate through the internet.
According to statistics from the Ministry of Commerce and the State Administration of Foreign Exchange, the total amount of China’s direct overseas investment in 2008 has reached $ 52.15 billion, including $ 40.65 billion of non-financial investment and $11.5 billion of financial investment. As of the effectiveness of the Measures, there must be more Chinese enterprise “going global” to participate the international cooperation and competition.