China’s New Foreign Investment Law – With A Special Note On Swiss-Chinese Investment

36 Pages Posted: 6 Jan 2020

Date Written: December 14, 2019

Abstract

The new Foreign Investment Law (“FIL”) will come into force in China on 1 January 2020. Simultaneously, the current „three foreign investment laws”, namely the EJV Law, CJV Law and WFOE Law, will be repealed. The new legal regime subscribes to the spirit of national treatment of foreign-invested entities (“FIE”), although adopting specific rules for FIE’s in itself prevents real national treatment of such entities. This thesis discusses achievements as well as open questions with regard to the FIL. Important topics include the FIL’s new foreign investment security review system, the new working mechanism for complaints of foreign investors as well as the nature of “policy commitments” issued by government authorities towards foreign investors. In addition, the paper discusses the FIL’s effect on corporate government structures of existing FIEs and on the legal situation of “variable interest entities” operating in China.

Keywords: Chinese Foreign Investment Law, Foreign Direct Investment, Negative List, Catalogue, National Treatment, Security Review System, Working Mechanism For Complaints, Policy Commitments, Variable Interest Entities

JEL Classification: K20

Suggested Citation

Stucki, Marius, China’s New Foreign Investment Law – With A Special Note On Swiss-Chinese Investment (December 14, 2019). Available at SSRN: https://ssrn.com/abstract=3503897 or http://dx.doi.org/10.2139/ssrn.3503897

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