Laws and Regulations Update in October 2016

1. Decision of the Standing Committee of the National People’s Congress on Amending Four Laws including the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises

Published on 5th September 2016 and coming into effect on 1st October 2016, the Decision involves the amendment of Law of the PRC on Wholly Foreign-Owned Enterprises, Law of the PRC on Chinese-Foreign Equity Joint Ventures, Law of the PRC on Chinese-Foreign Contractual Joint Ventures and Law of the PRC on the Protection of Investments of Taiwan Compatriots. According to the amended laws, the registration system applies to foreign invested companies, joint ventures, Chinese-Foreign cooperative companies, which are not required by national laws to follow special market access administration rules promulgated by or with approval of the State Council, when they are being established or undergoing a change. The decrees issued by the State Council ordering a temporary change of laws and rules for the free trade zone as authorized by the Standing Committee of the National People’s Congress will no longer continue in effect.   [Full Text]

2. The State Council Makes the Opinions on Ensuring the Continuous Healthy Development of Business Startups Available to the Public

Published on 20th September 2016, the Opinions has Clause 8 requiring that “equal treatment should be given to domestic and foreign invested businesses, restrictions on allowing foreign investment into the Chinese market should be relaxed, relevant administrative processes should be simplified, the scale of foreign investment in startup businesses should be broadened, more support should be given to startup businesses in seed or initial phases, the use of RMB currencies in cross-border and other related investment or trade activities be encouraged, an amount of RMB currencies obtained from foreign exchange capital settlements should be allowed to be transferred into foreign invested startup businesses according to the actual investment scale”   [Full Text]

3. The People’s Bank of China and the State Administration of Foreign Exchange Co-issued the Notice on Several Issues Concerning Securities Investment by Qualified Foreign Organizations Using RMB Currencies                          

Published on 5th September 2016, this Notice requires the implementation of investment allowance registration or official approval policies applying to each of qualified investors using RMB currencies and sets out basic allowance standards, materials necessary for the registration of an investment allowance within the scope of basic allowances, materials necessary for the application for an investment allowance outside the scope of basic allowances, administrative policies on the balance of payments for the investment, etc.   [Full Text]

4. The Customs Tariff Commission of the State Council Issues the Notice on Adjusting the Import Tariff on Some Kinds of Information Technology Products Payable by the Most-Favored Nations

Published on 9th September 2016 and taking into effect on 15th September 2016, this Notice grants a tariff reduction for the most-favored nations importing one of the information technology products included in an annex to the Amendment to the Schedule of Tariff Concessions for the Accession of the People’s Republic of China to the World Trade Organization. There are 484 tax numbers in the Tariff of China that respectively correspond to relevant products ranging from new generations of multicomponent integrated circuits, touch screens, semiconductors and production equipment, audiovisual products, medical equipment, device and instrument, special components, accessories and raw materials needed to produce information technology products, etc.

The import tariff on most of the above products will be lowered to zero in the following three or five years, with that on a small number of these products to be lowered in the following seven years.   [Full Text]

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