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Expanding Overseas Markets and Exploring Global Business Opportunities - An In-Depth Explanation of Approval and Filing for Overseas Direct Investment (ODI) By Enterprises
According to data released by the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, in 2021, investment flowing to the equipment manufacturing industry accounted for 52.5% of manufacturing investment, up 6.4% from the previous year, with metal products and computer/communication and other electronic equipment manufacturing industries increasing by 1607.1% and 22.6%, respectively. In 2022, overseas direct investment flowing to the manufacturing industry amounted to $21.6 billion, an increase of 17.4%, accounting for 18.5% of the total. Local enterprises' overseas investment increased by 13.1% from the previous year, and the proportion of total overseas investment increased to 80.4%. Guangdong, Zhejiang and Shanghai ranked among the top 3 local overseas investments cities.
The year 2023 is the opening year of the comprehensive implementation of the spirit of the 20th Party Congress. The global industrial chain and supply chain are being reconstructed at an accelerated pace, economic globalization is entering an adjustment period, and the policy adjustment and policy coordination of major economies may be favorable to overseas direct investment. Chinese enterprises should seize the opportunity to implement overseas investment activities according to their own development needs and conduct Overseas Direct Investment Filing or Approval prior to investment, safeguarding national interests and security.
According to the Administrative Measures for Overseas Investment of Enterprises (Order No. 11 of the National Development and Reform Commission, 2017), Overseas investment refers to the investment activities of Chinese enterprises within the People's Republic of China, either directly or through their controlled overseas enterprises. These activities involve the investment of assets or equity, providing financing or guarantees, and other means to obtain ownership, control, operational management rights and other related interests. This includes but not limited to, the following situations:
(1)The Development and Reform Commission
1）Administrative Measures for Overseas Investment of Enterprises (NDRC Order No. 11 of 2017)
2）Notice of the National Development and Reform Commission on the Release of the Catalogue of Sensitive Industries for Overseas Investment (2018 Edition) (NDRC Notice No. 251 of 2018)
3）Notice of the National Development and Reform Commission on the Release of Supporting Template Texts for the Administrative Measures for Overseas Investment of Enterprises (2018 Edition) (NDRC Notice No. 252 of 2018)
4）Implementation Measures for the Management of Overseas Investment by Enterprises in Zhejiang Province (Zhejiang Provincial DRC Order No. 562 of 2018)
5）The Measures for the Administration of Overseas Investment by Enterprises (Zhejiang Provincial DRC Order No. 9 of 2020)
（2）The Commerce Department
1）The Measures for the Administration of Overseas Investment (Ministry of Commerce of the People's Republic of China Order No. 3 of 2014)
2）Notice of the General Office of the Ministry of Commerce on Enhancing the Management of Overseas Investment (MOFCOM General Office Letter No. 663 of 2014)
According to Article 32 of the "Administrative Measures for Enterprise Overseas Investment" (National Development and Reform Commission Order No. 11 of 2017, hereinafter referred to as "Order No. 11"), for projects subject to approval or filing, the investing entity shall obtain project approval documents or filing notices before the implementation of the project. The term "before the implementation of the project" referred to in Order No. 11 means before the investing entity or its controlled overseas enterprise invests assets or equity in the project (excluding pre-project expenses that have been approved or filed according to Article 17 of Order No. 11) or provides financing or guarantees.
According to the "Implementation Measures for Overseas Investment Management of Enterprises in Zhejiang Province" (Zhejiang Development and Reform Commission [2018] No. 562) and the "Administrative Measures for Enterprise Overseas Investment" (Zhejiang Development and Reform Commission Order No. 9 of 2020), for non-sensitive projects with Chinese investment amounting to or exceeding 1 billion US dollars, approval shall be obtained from the National Development and Reform Commission (NDRC). For overseas investment projects with Chinese investment amounting to 2 billion US dollars or more involving sensitive countries or regions and sensitive industries, the NDRC shall submit its review opinions to the State Council for approval. For projects with Chinese investment below 10 million US dollars, the development and reform commission (office) of the district, city, or county where the registering entity is located, as entrusted by the Provincial Development and Reform Commission, shall implement filing management.
（1）Approval Process
For projects that require approval according to regulations, the following documents should be submitted to the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) for review.
（2）Filing Process
For projects that require filing according to regulations, companies should file with the relevant departments based on their nature and the amount of overseas investment. The filing process and required documents are as follows.
Zhejiang Province boasts a vibrant and promising environment for local enterprises seeking overseas investment opportunities. In this article, we aim to provide assistance and inspiration to companies planning to engage in overseas investments. If you have any questions or concerns regarding the content of this article, please don't hesitate to contact us. We are committed to providing you with professional services and support.
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