On April 8, 2015, the Ministry of Commerce issued the announcement No. 12 of 2015, releasing the Record Management Methods on Foreign Investment in Free Trade Zones (Pilot)(hereinafter referred to as the Method).
There are 20 articles included in the Method, covering stipulations on the application scope, organization, mode and procedure of the record, as well as the information report, supervision and inspection and integrity management. On the basis of The Record Management Methods on Foreign Invested Enterprises in China (Shanghai) Pilot Free Trade Zone issued by the government of Shanghai municipality in September 2013, and based on summarizing the one-year practice of Shanghai Pilot Free Trade Zone, the Methods made improvements in the following aspects to further play the pioneering role of the Free Trade Zones in the reform of foreign investment management system:
1. The connection between the record of the contract of foreign invested enterprises and the registration of the establishment and alteration of enterprises is disconnected. It means that the record would not be the precondition of the registration.
2. The information report is introduced, and all the foreign invested enterprises in the zones should fulfill their obligations of annual report.
3. The supervision and inspection requirements for foreign investment are detailed, and the organizations, modes, contents of the inspection, as well as the punitive measures to the issues found in the inspection are defined.
4. Integrity records system of foreign investment is established, and the sharing of records and integrity information among all departments is realized.
The above institutional arrangements aim at further expanding the opening up, promoting the reform of foreign investment management system, and further enhance the facilitation of foreign investment in the Pilot Free Trade Zones. To steadily implement the transformation from the approval to the record of the contracts of foreign invested enterprises, and build up the service mechanism of cooperative supervision among related departments, the investors and foreign invested enterprises could do anything that are not forbidden by the law, and the government could not do what was not authorized by the law and must fulfill their legal obligations, in order to create an open, transparent, international, market-oriented, and legalized investment environment.
