The State Council of China has demonstrated its commitment to encouraging greater foreign investment by releasing a comprehensive set of Opinions aimed at optimizing the environment for Foreign Direct Investment (FDI) in the country. The measures are designed to foster a more conducive business climate and include:
Support for R&D and Technology Collaboration
The state will support foreign entities in establishing research and development centers in China, collaborate on technology research and industrial applications with domestic enterprises, and encourage foreign investment enterprises and their R&D centers to undertake significant scientific research projects.
Acceleration of Biopharmaceutical Projects
Measures will be taken to expedite the implementation and production of foreign-invested projects in biopharmaceuticals. This includes encouraging foreign-invested enterprises to conduct clinical trials of overseas listed cell and gene therapies in China and streamlining the registration process for drugs transferred from overseas to domestic production.
Expansion of Telecommunications Services
Pilot zones for value-added telecommunications services will be steadily increased, including domestic internet virtual private network services (with a foreign equity ratio not exceeding 50%), information service services, and internet access services.
Intellectual Property and Equity Financing
The development of combined pledge financing for intellectual property, equity, and related physical assets will be encouraged, with support for the standardized exploration of intellectual property securitization and increased pilot zones for equity investment and venture capital share transfers.
Incentives for Investment Companies and Headquarters
Eligible foreign investors will be encouraged to establish investment companies and regional headquarters in China. Enterprises established by these investment companies can enjoy foreign-invested enterprise statuses, and the implementation of qualified foreign limited partner (QFLP) domestic investment pilot projects will be deepened.
Non-Discrimination and Equal Treatment
Foreign investment enterprises and their products and services will not be excluded or discriminated against, except where explicitly provided by laws and regulations or involving national security fields, ensuring they enjoy the benefits of all policies.
Dispute Resolution and Intellectual Property Protection
The mechanism for responding to international investment disputes will be improved, with a focus on strengthening dispute prevention and handling international investment disputes effectively. Additionally, there will be a resolute crackdown on the infringement of intellectual property rights of foreign-invested enterprises.
Data Security and Compliance
A green channel will be established for qualified foreign-invested enterprises to efficiently conduct exit security assessments of important data and personal information, promoting the orderly and free flow of data. Support will be provided for implementing data exit security assessment systems and personal information protection certification.
Tax Incentives for Foreign Investors
The policy of temporarily exempting foreign investors from withholding income tax on the reinvestment of domestically obtained profits will be implemented, providing further incentives for foreign investment.-Fineline Info & Tech
