Name: Notice Relating to Delegation of Examination and Approval Authority for Overseas InvestmentProjects (《国家发展改革委关于做好境外投资项目下放核准权限工作的通知》, the “Notice”)
Issuing authority: National Development and Reform Commission (“NDRC”)
Effective date: 14 February 2011
Subject: Outbound Investment
The release of the NDRC’s Notice marks an important step in facilitating outbound investments by PRC entities and supporting China’s ‘Go Global’ development strategy, giving local NDRCs more authority in approving overseas investment projects by PRC entities.
Highlights
- The Notice significantly raises the thresholds for overseas investment requiring the prior approval of the central NDRC, limiting central NDRC approval to the following: investment in resources development where the proposed investment by the Chinese party(ies) is US$300 million or more;
-
investment in non-resources development where the proposed investment by the Chinese party(ies) is US$100 million or more; or
-
any of the following overseas investment projects, irrespective of the investment amount (“Special Projects”):
(i) investment in any country which has not established diplomatic relationships with the PRC, is subject to international sanctions or is in a state of war or turmoil; or
(ii) investment in sensitive industries, such as telecommunications, development and utilization of cross-border water resources, large-scale land development, main power grid and news media.
A Special Project may even require the State Council’s approval, although the circumstances prompting such an approval are not set out in the Notice.
- The following overseas investments (excluding Special Projects) by a “local entity”, that is any PRC entity which is not under the direct leadership of the central PRC government,) are subject to local NDRC approval at the provincial level:
- investment in resources development where the proposed investment by the Chinese party(ies) is less than US$300 million; or
- investment in non-resources development where the proposed investment by the Chinese party(ies) is less than US$100 million.
- A “central entity” may conduct any of the above overseas investments without having to obtaining approval from the local NDRC although they will still be required to register the overseas investment with the central NDRC.
- The Notice applies equally to investments in Hong Kong and Macau. Investments in Taiwan, however, are subject to a separate set of rules issued in 2010.
If you would like to discuss anything regarding this Alert please contact Fang Jian (Shanghai), Nicola Mayo (Shanghai), Simon Poh (Shanghai), or Betty Yap (Hong Kong).
