A February 2015 Morrison & Foerster client alert reported on the issuance of a new draft Foreign Investment Law (“FIL”) that, if promulgated, would institute far-reaching changes to the Chinese government’s oversight of foreign investment. Twenty months on, the FIL has yet to be promulgated. Nonetheless, two key changes anticipated by the draft FIL – the introduction of a new “negative list” in place of the foreign investment catalogue and a shift away from mandatory government approval to a filing system for most types of investment – come into effect October 1, 2016, as a result of amendments to key existing foreign-investment legislation passed by the Standing Committee of the National People’s Congress (“NPC”) on September 3, 2016. Affected laws include the core laws governing establishment of wholly foreign-owned enterprises and both Sino-foreign equity and Sino-foreign cooperative joint ventures (often collectively referred to as “foreign investment enterprises” or “FIEs.”)

In anticipation of these changes, the Ministry of Commerce (“MOFCOM”) has circulated for public comment new draft measures governing MOFCOM filings in regard to FIEs, which we expect will be finalized soon so they can also come into effect October 1.