Understanding the New Chinese Outbound Investment Regulations

Understanding the New Chinese Outbound Investment Regulations

On 1 March 2018, new Administrative Measures for Overseas Investments by Enterprises (the measures) by Chinese National Development and Reform Commission (NDRC) will come into effect.

KPMG’s report, Demystifying Chinese Investment in Australia, established that Australia is the second largest country recipient of Chinese Outbound Direct Investments with close to US$90 billion of accumulated new investments from 2007 to 2016. Understanding the new Chinese government regulations is therefore important for Australian vendors and deal advisors to properly evaluate acquisition proposals from potential Chinese investors

Key Changes

The new measures aim to improve the competitiveness of Chinese outbound investment by:

  • Simplifying the filing and approval procedures
  • Eliminating the filing requirement of a project information report before commencing substantive work on the transaction
  • Limiting the government processing time, and
  • Extending the filing confirmation / approval notice to two years unless there are any material changes in the key terms.
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