Catalogue of Industries for Guiding Foreign Investment (2015 Revision)

source：　 date：2015-04-01　 author：

On March 13, 2015, NDRC (National Development and Reform Commission) and MOFCOM (Ministry of Commerce) jointly published the Catalogue of Industries for Guiding Foreign Investment (2015 Revision) (the “Catalogue 2015”), effective from April 10, 2015 and replacing the 2011 Edition of the Catalogue.

I.     Real Estate Industry

Real estate industry was in the Restriction Section of the 2011 Edition of the Catalogue, including 1. Development of tracts of land (limited to Chinese-foreign equity or contractual joint ventures); 2. Construction and operation of high-class hotels, high-class office buildings, and international exhibition centers; 3. Real estate secondary market transactions and real estate intermediary or brokerage companies.

In the Catalogue 2015, real estate industry has been totally removed from the Restriction Section, which means no business of real estate industry is restricted any more.

However, foreign investment in the real estate industry is still subject to relevant regulations which are restrictive in nature (such as the principle of commercial presence in terms of purchasing properties, the principle of project company in terms of establishing a real estate development company, recordation procedures in MOFCOM etc.). It is to be observed whether such restrictive regulations will be modified to match this change in the Catalogue 2015.

II. E-commerce

While keeping the requirements of foreign investment up to 50% in added-value telecommunication services and up to 49% in basic telecommunication services, Catalogue 2015 has no limitation on the percentage of foreign investment in E-commerce businesses.

However, since the Regulations on Foreign-invested Telecommunication Enterprises has not been modified yet, attention shall be paid to the requirements therein regarding the qualification of foreign investors and type of enterprise.

III.  Retail

In Catalogue 2015, the businesses of Direct Sales, Sale by Mail and Online Sales have been removed from the Restriction Section.

IV. Medicine, Medical Devices, and Medical Institutions

1.       Medical Institutions. Catalogue 2015 has listed again the medical institutions into the Restriction Section. Pursuant to the Circular on Carrying out the Pilot Program of the Establishment of Wholly Foreign-Owned Hospitals which was published by the authorities concerned on July 25, 2014, wholly foreign-owned hospitals are allowed in the areas of Beijing Municipality, Tianjin Municipality, Shanghai Municipality, Jiangsu Province, Fujian Province, Guangdong Province and Hainan Province. Pursuant to Catalogue 2015, foreign-invested hospitals in other areas are still restricted.

 2.       Manufacture of Medicines. In general, Catalogue 2015 has expanded the items of medicines in the Encourage Section, cancelled the Restriction Section, and maintained Forbidden Section the same as before.

3.       Manufacture of Medical Devices. The items of medical devices in the Encourage Section has been expanded in the Catalogue 2015.

4.   R & D of GMOs (genetically modified organisms). R & D of GMOs is no longer in the Forbidden Section of the Catalogue. This is an important change which will have positive effect in the R&D in the bio-technology in China.