China Laws and Regulations Update in July 2017

1.Circular on Special Administrative Measures for the Access of Foreign Investment to the Pilot Free Trade Zone (Negative List) (for 2017)

The revised edition is intended to further improve the access for foreign investment. The new negative list consists of 15 categories, 40 sub-categories and 95 special administrative measures, with 10 sub-categories and 27 measures removed from the negative list 2015, including 6 sub-categories with respect to subway equipment manufacturing, pharmaceutical manufacturing, road transport, insurance, accounting and auditing and other business services removed and 4 sub-categories combined with other sub-categories. The Special Administrative Measures on Foreign Investment Access to the China (Shanghai) Pilot Free Trade Zone (Negative List) published on 8th April 2015 was abolished at the same time.

(Source: Website of the General Office of the State Council)

http://www.gov.cn/zhengce/content/2017-06/16/content_5202973.htm

2.Provisional Regulations on Mutual Access and Cooperation between the Mainland’s and Hong Kong’s Bond Markets

The Provisional Regulations clearly states that overseas investors that meet requirements of the People’s Bank can invest in the Mainland Interbank Bond Market through “Northbound Trading” and are allowed to invest all kinds of exchangeable bonds in the Mainland Interbank Bond Market. Electronic trading platforms and other organizations approved by the People’s Bank can apply for registration with the People’s Bank, Shanghai Headquarters on behalf of overseas investors. The Provisional Regulations applies to “Northbound Trading”, which means allowing Hong Kong and other overseas investors to invest in the China Interbank Bond Market through mutual access between the financial infrastructure institutions in Hong Kong and the mainland with regard to trading, custody, and settlement. Regulations applicable to “Southbound trading” will be laid down later.

(Source: Website of Bank of China)

http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3330621/index.html

3.Compliance Regulations for Securities Companies and Securities Investment Fund Companies

The Regulations makes companies able to improve the effectiveness of their compliance systems and continue increasing their self-regulation ability and helps the industry to achieve continuous and sound growth, by clarifying duties of directors, supervisors, senior management, compliance officers, etc., giving more protection to people complying with applicable bylaws when performing their duties, taking tougher action to punish those who violate laws or rules and pursue responsibilities against them.

(Source: Website of China Securities Regulatory Commission)

http://www.csrc.gov.cn/pub/zjhpublic/zjh/201706/t20170609_318115.htm

4.Circular on the Policy of Deducting Advertising and Publicity Expenses from Taxes Payable

The Circular states that by 31st December 2020 the part of advertising and publicity expenses of a business selling or manufacturing cosmetics or manufacturing drugs or drinks (not including alcoholics) in a year that equals to 30% or less of the annual sales (or revenue) of the year is deductible with the part in excess of this amount carried over to and deductible in the next fiscal year.

(Source: Website of the Ministry of Finance)

http://szs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201705/t20170531_2611605.html

5.Circular on Several Issues Concerning the Filing of Mortgages on Real Property by Financial Assets Management Businesses, Etc. in the Process of Business Running

The Circular clearly states that any of financial assets management businesses and their branches that do business activities as permitted by applicable laws can file their mortgages on real property. The agreement made by the financial assets management business to restructure its organization after acquiring bad assets with the debtor can be used as the main creditor contract to file its mortgages. The financial institution and the mortgagor can file the mortgage with the real property authority by submitting necessary documents such as the real property ownership certificate, main creditor contract, mortgage agreement, etc. The real property authority should accept and go through the process of reviewing the application. The Circular states that the real property authority should not include any review, filing or other procedure that has no legal basis in precedent conditions or processes of filing the mortgage on real property.

(Source: Website of the Ministry of Land and Resources)

http://www.mlr.gov.cn/zwgk/zytz/201706/t20170605_1509531.htm

 

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