Seven Departments Issue Twelve Measures to Encourage Domestic Reinvestment by Foreign-Invested Enterprises

On July 7, the National Development and Reform Commission, together with six other departments, jointly issued the Notice on Implementing Several Measures to Encourage Domestic Reinvestment by Foreign-Invested Enterprises(the “Notice”), which took immediate effect.

The Notice comprises twelve articles and applies to foreign-invested enterprises that reinvest their undistributed profits or profits lawfully distributed to overseas investors in China. It requires all regions to establish project databases for reinvestment by foreign-invested enterprises, with eligible projects entitled to support policies. Measures include supporting flexible land use methods to reduce costs, streamlining industry access permit procedures, and implementing tax incentive policies; permitting the transfer of foreign exchange funds according to regulations, and allowing qualified reinvestment projects to benefit from support policies for imported equipment; optimizing the management of loans from related foreign shareholders and encouraging financial institutions to innovate services; promoting pilots for investment information reporting, enhancing information sharing, and optimizing investment evaluation methods.