DetailsOn 15 March 2019, Second Session of 13th National People¡¯s Congress approved the Foreign Investment Law of the People¡¯s Republic of China (the ¡°Law¡±) which will take effect on 1 January 2020. By then, three existing historic foreign-capital related laws, adopted since the beginning of China¡¯s reform and opening up more than 40 years ago, will be stepped down from the stage.
As a new and fundamental law in the field of foreign investment, the Law is embodiment of China¡¯s determination of continuous opening-up on a larger scale. The Law offers various favorable provisions and terms in different respects, and emphasizes stronger protection of foreign-capital enterprises in China in response to generally concerned issues such as administrative interference and intellectual property rights protection. Essentially, the principles of ¡°national treatment for registration¡± and ¡°negative list¡± specified in the Law are definitely a shot in the arm for foreign investors who are considering making or have made their entry into the Chinese market. The principle of national treatment for registration means that as of the effect of the Law, tedious procedures of investing in China, filing for approval and/or record for instance, will be reduced to a large extent. In the most updated version of ¡°Negative List¡± released by Chinese authorities, special administrative measures are imposed on only 40 industries. It should be noted that reportedly, nearly 70% of the investment into mainland China are from Hong Kong and Macau. Although the Law does not apply to investment from these two special administrative regions as they are indeed a part of China, it could certainly considered as an useful reference and would in no way harm the present practices and arrangements whatsoever.
With the launch of national development strategies of ¡°the Belt and Road Initiative¡± and ¡°Going Global¡±, the important role of foreign-related legal services in China started to unfold. Subsequently, Chinese government has undertaken a series of reform and measures. Back in May 2017, the Opinions on Developing the Foreign-Related Legal Service Industry was published as principal outline. Later in September, the Ministry of Justice announced to carry out pilot projects of Chinese law firms employing foreign lawyers in Beijing, Shanghai and Guangzhou, in attempt to upgrade the strength and competitiveness of foreign-related legal services in China. The Ministry has also organized a professional foreign-related legal team by building up a national talent pool of lawyers skilled at offering foreign legal services. All these reforms and innovation will bring about exciting opportunities for the development of foreign-related legal services in China.