On Jan. 1, 2020, the Foreign Investment Law will come into effect. In addition, the Regulation on the Optimization of Business Environment will come into effect as well, which was promulgated on October 8, 2019. This is good news for people doing business in China.
Let’s look at some highlights of these new regulations:
1. The direct allocation of market resources and the direct intervention in market activities by the government will be reduced, minimizing institutional-oriented transaction costs.
2. The establishment of a unified, open, and modernized market system designed to promote the free flow of various production elements, and guarantee fair market competition, is expected to be accelerated.
3. China government shall further open up domestic (Chinese) business to the outside world and actively promote foreign investment, giving equal treatment to domestic-funded enterprises and foreign-invested enterprises.
4. Competent authorities will establish a punitive compensation system for infringement of intellectual property, improve the assistance mechanism for protecting intellectual property, and intensify the protection of intellectual property. They will also Improve the efficiency of trademark registration and the patent application review.
5. Enterprise registration rules, streamline of the formalities required for enterprise registration will be standardized. The reform of “separation of permits and business licenses” will be promoted.
For existing administrative permits, they will either cancel examination and approval of some permits or change the examination and approval procedure to record filing, or the business owner will have to promise that they are qualified (or will be qualified) within a certain timeframe, or optimize the examination and approval procedure, improve examination and approval efficiency, if the permits are still required. Except for specific areas stipulated by laws and administrative regulations, permits shall not be a prerequisite for enterprise registration.
6.    Relaxes restrictions on market access and implements a national unified negative list system for market access.
Useful link:
MINISTRY OF COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA
