Interim Measures on the Reporting of Outbound Investments Subject to Record-filing or Approval

Thursday, 01 February 2018 17:24

On 25th Jan 2018, seven Chinese departments, including the Ministry of Commerce ("MOFCOM"), the People's Bank of China, the State-owned Assets Supervision and Administration Commission, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission and the State Administration of Foreign Exchange, have jointly issued the Interim Measures on the Reporting of Outbound Investments Subject to Record-filing or Approval (the "Measures") which immediately takes effective from the issuing date. Shanghai Dongjin finds the following as the new and key points to the Measure on the outbound investment.


  1. The domestic investor shall submit regular reports to the competent authority that previously processed the record-filing (approval) formalities for it, under the principle that "any investment filed on the record or approved requires the mandatory submission of reports", to have it informed of information about the outbound investment at key stages, including but not limited to matters at the preliminary stage before the outbound investment or mergers, the progress of the funded overseas project under construction, the key problems during the outbound investment and etc.
  2. The Measures provide that if any significantly negative event or unexpected safety accident arises from the outbound investment made by a domestic investor, a prompt notification shall be given to the competent authority concerned, under the principle of "one-time notification for each event".
  3. Further, the Measures clarify the obligation of the authorities to submit the statistics of outbound investment to MOFCOM every half year.
  4. If the domestic investor is found any illegal activities as tax invasion, foreign exchange cheat, the MOFCOM can transfer the clues to the tax bureau, administrative bureau of industry and commerce, the public security or the foreign exchange bureau.
  5. The Measure mentions that the “encouraged development and the negative list” mode will be introduced into the supervision on the outbound investment. However, there is still not too much details on it.
  6. The Measures clarify the definition of the “Ultimate Destination”. The “Ultimate Destination” for the outbound investment is the final location the outbound investor to use for the project construction or continuous business operation. As a result, the local MOFCOM will not record or file any SPV during the outbound investment.
  7. The Measures note that related competent authorities shall supervise the outbound investment respectively under their jurisdiction, and watch closely over six types of outbound investment, including "the outbound investment where the amount contributed by the Chinese investor(s) is equivalent to $300 million or above", the investment in the sensitive countries and the sensitive industries, the investment having any fatal loss, or involving in any serious safety, mass event or illegal activities.


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