MOFCOM Delegates Certain Matters Regarding Examination and Approval of Foreign Investment
On March 5, 2009, the Ministry of Commerce ("MOFCOM") issued a notice, effective the same date, in an effort to further improve the examination and approval process for foreign investment by delegating more power to its counterparts at the provincial level and to national economic and technology development zones. According to the notice, commercial authorities at vice-provincial cities and national economic and technology development zones shall have the same approval authority as that delegated to provincial commercial authorities. Approval for the advanced dismissal of supervision over equipment imported by foreign-invested enterprises ("FIEs") will be cancelled, and only filing with commercial authorities will be required for establishment of branches in China by FIEs. Establishment and recapitalization of, and other subsequent changes to, FIEs that fall within the encouraged category, but were originally subject to approval of MOFCOM, will now be approved by local counterparts at provincial levels and authorities at vice-provincial cities and national economic and technology zones. Additionally, subsequent changes to FIEs that have been established upon MOFCOM's approval should be examined and approved by the local competent commercial authorities, except capital increases that exceed relevant quotas and are subject to approval by the National Development and Reform Commission ("NDRC"), and equity transfers in which the control of shares is transferred from Chinese parties to foreign parties. Mergers and acquisitions by foreign investors having a transaction value not exceeding USD100 million for encouraged and allowed projects and no more than USD50 million for restricted projects are now also subject to approval by MOFCOM local counterparts, rather than MOFCOM itself.
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