China welcomes investors with new Foreign Investment Law

February 2020

The commencement of China’s new Foreign Investment Law (“FIL”) on 1 January 2020, presents significant opportunities for foreign investors, including more flexibility on joint venture terms and streamlined entity establishment procedures.  This alert provides an overview of the key provisions of the FIL and the long-awaited implementation regulation published on 26 December 2019, as well as the matters foreign investors should consider under the new regime.  Those changes, including a new information collection regime, continue the recent trend of affording foreign investors better access to the China market while subjecting them to continued regulatory scrutiny.

Key takeaways

1. Unification of corporate forms, structures, and operating rules will lead to a reshuffling of power among JV partners and opportunities to renegotiate;

2. The opening-up and promotion of foreign investment coupled with liberalisation measures will prompt opportunities of restructuring and re-investment;

3. Concrete steps to protect intellectual property rights opens up the possibilities of rearranging existing and future intellectual property rights;

4. A more convenient, efficient, and transparent administration of foreign investment equals more certainty and more manageable processes with less unexpected hiccups

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