China adopts new Foreign Investment Law with effect 1 January 2020
29 May 2019
On 15 March 2019, the National People’s Congress of the People’s Republic of China passed the Foreign Investment Law (“FIL”). The FIL states its purpose as, amongst others, the further promotion of foreign investment, protection of the legitimate rights and interests of foreign investors and standardisation of the administration of foreign investment in China. The FIL will come into force, and replace existing laws governing Chinese-foreign joint ventures and wholly foreign-owned enterprises (collectively, foreign-invested enterprises, “FIEs”), on 1 January 2020, with the intention of creating a more stable, transparent and predictable business environment and level playing field for overseas investors. FIEs will be treated the same way as local enterprises, including undergoing the same incorporation process and conforming to the same governance rules, unless their sectors fall under the Negative List which was announced on 28 June 2018 and came into force on 28 July 2018.