Understandings of Features of “Measures for the Administration of the Verification, Approval and Filing of the Overseas Investment Projects” (Formally Implemented on May 8, 2014)

　
 

“The term ‘overseas investment projects’ shall refer to the activities by which an Investment Entity obtains overseas ownership, operation and management rights or other relevant rights through the injection of assets and rights such as currency, negotiable securities, physical objects, intellectual property rights or technology, equity or claims, or through the provision of security.” –Article 3 of “Measures for the Administration of Verification,Approval and Filling of the Overseas Investment Projects”

“The term ‘the amount of investment by the Chinese party’ shall refer to the total amount of the injection of assets and rights such as currency, negotiable securities, physical objects, intellectual property rights or technology, equity or claims in overseas investment projects, or the provision of security by an Investment Entity.” -- Article 4 of “Measures for the Administration of Verification, Approval and Filing of the Overseas Investment Projects” 

On April 10, 2014, National Development and Reform Commission(NDRC) posted on its official website the “Measures for the Administration of Verification, Approval and Filing of the Overseas Investment Projects” (the Decree No.9, hereinafter referred to as “the Measures”), which came into force on May 8, 2014. And the “Interim Measures for the Administration of Verification and Approval of the Overseas Investment Projects” promulgated by the Development and Reform Commission on October 9, 2004 (the Decree No.21) was repealed simultaneously.

Compared with the Decree No.21, the Measures mainly differ in the following aspects:

Firstly, overseas investment projects shall be implementedthrough verification and approval instead of examination and approval. Resource development projects and non-resource development projects are distinguished no more in the Measures. And according to the Measures, the verification and approval authority of NDRCshall uniformly be defined to approve the projects with the amount of investment by Chinese party up to $1 billion or abovefromformer $300million or abovefor the resource development projectsand $100 millionor above for the non-resource development projects; The projects involving sensitive countries or regions, sensitive sectors still need to be approved by the investment departments of the State Council.

Secondly, the projects under $1 billionwill be changed to file system instead of approval system. The projects of $300millionor over investment by central enterprises or local enterprisesshall be reported to NDRC for filing. The projects under $300millioninvested by local enterprises shall be filed by provincial-leveldepartments.

Thirdly,there-investment projects of Chinese enterprises which have been established oversea need no more to beverified or filed if it is not required for domestic investment entities to provide finance or guarantees.

Fourthly, “the investment entity shall have the corresponding investment strength” is also added as one of the qualifications of approval and filing for overseas investment projects.

Fifthly, for the projects to be approved by NDRC or that to be reported to the State Council by NDRC, local companies shall first submit the project application report directly to its provincial-level development and reform department, then the provincial-level development and reform department shall submit examination and verification opinion to the State Council for approval.

The Projects to be filed in NDRC also adopt the same procedure according to which it is no longer requiredthatlocal enterprises should report from the country to the city, then from the city to the province.

Sixthly,the filing for overseas investment projects will be implemented though filling the forms instead of providing project application report. Applicants need to fill in the required forms and necessaryaccessories, and will complete the filing process by using an online filing system in the future.

Seventhly, the Measures clearly defines the time limitsfor NDRC to approve and file the overseas investment projects.

(1) NDRC shall complete verification and approval of the application within 20 working days (not including the time for assessment) from the date of the acceptance of a project application report. If it is unable to render a decision on verification and approval due to special, complex or sensitive factors within 20 working days, an extension of 10 working days shall be approved by the responsible person of NDRC.

(2) NDRC shall issue the filing notice within 7 working days from the date of the acceptance of a project filing application form.

(3) When the application materials of a project for approval or filing do not meet the requirements, NDRC shallissue disposable rectification notice to applicants within 5 working days. and after the applicants have rectified, NDRC shall officially accept the approval or filing project application.

(4)For theprojects that need to undergo assessment, NDRC shall complete the assessment within no more than 40 working days in principle.

Eighthly, the Measures stipulate the validityof approval documents and filing notice. For construction projects, the validity is two years; and for other projects, the validityis one year. (Chinese version compiled by Shan Yuqiu, translated by Fan Rong, and revised by Shan Yuqiu)