China Releases New Regulations for Foreign Investment
BEIJING, Apr. 14 – China’s State Council released new foreign investment regulations on Tuesday, aiming to both promote a good business climate while also cutting funds to projects which harm the environment.
The new policies will continue to support Chinese A-share listed companies in promoting domestic and foreign investment. The guidelines will also standardize foreign companies’ domestic investment in addition to corporate mergers and acquisitions. Companies targeted include those in high-tech industries, service sectors, energy-saving, and environmentally friendly projects.
According to the new regulations, a national security examination mechanism will be introduced soon for foreign-funded companies’ merger and acquisition operations in China, and qualified companies are allowed to issue corporate bonds or medium-term bills and to go public.
The regulations also encourage foreign enterprises to set up regional headquarters, research and development centers, procurement hubs, financial management and other functional offices in China, especially in central and western regions with environmentally friendly and labor-intensive projects.
Importing items and equipment for scientific and technological development by qualified foreign-funded R&D centers will be exempt from tariffs, importing value-added tax and goods and services tax by the end of 2010.