New law enabling a quicker process to incorporate China subsidiaries

Rollover of negative list and recordal system nationwide

Tax Alert

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On September 3, 2016 China published a new law[1], which amended the four laws[2] governing foreign invested enterprises (FIEs) including joint ventures (JVs) and wholly foreign owned enterprises (WFOEs), effective from October 1, 2016. The new law will significantly simplify the establishment of FIEs in China and their post-establishment corporate changes by eliminating the approval step with regard to the FIEs engaging in businesses outside the so-called negative list for foreign investment.


[1] Decision of the Standing Committee of the National People's Congress on Amending Four Laws Including the PRC Law on Wholly Foreign Owned Enterprises (全国人民代表大会常务委员会关于修改《中华人民共和国外资企业法》等四部法律的决定).

[2] The four amended laws are the PRC Law on Wholly Foreign Owned Enterprises, the PRC Law on Sino-foreign Equity Joint Venture Enterprises, the PRC Law on Sino-foreign Cooperative Joint Venture Enterprises, and the PRC Law on Protection of Taiwanese Investment.