China tightens rules for outbound investment
Companies must report fully before setting up foreign subsidiaries, setting stage for launch of upcoming Overseas Investment Regulations
The Ministry of Commerce and six other administrations have released a new regulation to tighten outbound overseas investment. Chinese enterprises that aim to set up companies abroad, have been ordered to provide all the required information to related regulators, Yicai.com reported.
The new rule applies to both financial and non-financial overseas investment. Related departments should report the information to the Ministry of Commerce.
If enterprises fail to report, the Ministry will take measures such as giving notices, interviewing or sending out warnings.
Han Kong, a counselor at the Foreign Investment and Economic Cooperation Department of the Ministry of Commerce, said the new rule is to prepare for the launch of the upcoming Overseas Investment Regulations.
“Information disclosure will have a certain burden on enterprises, but it is affordable,” Han added, “for a compliant company, all the documents are readily available.”
Meanwhile, the Ministry will also work on formulating a blacklist system for overseas investment.