globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

03 April 2019

China enacts new foreign investment law

On 15 March 2019, China’s National People’s Congress approved the Foreign Investment Law of the PRC (the Foreign Investment Law). The Foreign Investment Law will become effective on 1 January 2020 and will replace existing foreign investment laws.

The key features of the Foreign Investment Law are as follows:

  • Chinese subsidiaries of foreign parents will be treated in the same manner as Chinese-owned Chinese entities; however the former is subject to a negative list of foreign investment which prohibits foreign investors from investing in specific industries.
  • Foreign-invested enterprises are allowed to raise funds through the public offering of stock, corporate bonds and other securities.
  • New registration forms will be required for investments under the Foreign Investment Law. A five-year transition period is provided to change all required registrations forms to comply with the rules under the Foreign Investment Law.

The Foreign Investment Law intends to open the basic framework of investments to foreign investors, and to actively promote, protect and regulate the foreign investments. While many of the rules are still pending further interpretations, it is anticipated that the respective government authorities will provide clarifications and guidance of the rules.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Tax Services Limited, Hong Kong
  • Jane Hui | jane.hui@hk.ey.com
  • Becky Lai | becky.lai@hk.ey.com
Ernst & Young (China) Advisory Limited, Shanghai
  • Walter Tong | walter.tong@cn.ey.com
  • Vickie Tan | vickie.tan@cn.ey.com
Ernst & Young (China) Advisory Limited, Beijing
  • Henry Chan | henry.chan@cn.ey.com
  • Martin Ngai | martin.ngai@cn.ey.com
  • Andrew Choy | andrew.choy@cn.ey.com
Ernst & Young (China) Advisory Limited, Shenzhen
  • Clement Yuen | clement.yuen@cn.ey.com
Ernst & Young LLP (United States), China Tax Desk, New York
  • Min Fei | min.fei@ey.com
  • Andrea Yue | andrea.yue1@ey.com
  • Vickie Lin | vickie.lin@ey.com
  • Ryan Lu | ryan.lu@ey.com
  • Sherry Cui, Transaction Tax | sherry.cui1@ey.com
Ernst & Young LLP (United States), China Tax Desk, Chicago
  • Lucy Wang | lucy.wang1@ey.com
Ernst & Young LLP (United States), China Tax Desk, San Jose
  • Diana Wu | diana.wu@ey.com
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
  • Chris Finnerty | chris.finnerty1@ey.com
  • Kaz Parsch | kazuyo.parsch@ey.com
  • Bee-Khun Yap | bee-khun.yap@ey.com

ATTACHMENT

Document ID: 2019-5464

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more