What are the criteria for defining whether an outbound investment project is approved by the NDRC or the Ministry of Commerce?

In December 2016, the National Development and Reform Commission (NDRC), the Ministry of Commerce (MOFCOM), the People's Bank of China (PBOC), and the Administration of Foreign Exchange (AFE) strengthened the supervision of outbound investment. For the application for filing or approval of overseas investment project regulators will be accepted before the authenticity and compliance review and focus on large non-main business investment, partnership foreign investment, overseas listed Chinese enterprises delisted and other types of real estate, entertainment, sports clubs and other areas of investment projects. In addition, in practice, overseas investment projects with an investment amount of more than $5 million need to be reported to the SAFE for approval before the exchange of foreign exchange is allowed. After the implementation of the above regulatory measures, the phenomenon of funds out of the country is difficult. PCG Foreign Service believes that the current round of regulatory measures are aimed at screening the offshore investment market, regulating irrational and fake offshore investments, not to curb offshore investment, and that rational investment projects with real business needs will still be licensed by the regulator.

In August 2017, the National Development and Reform Commission (NDRC), the Ministry of Commerce (MOFCOM), the People's Bank of China (PBOC), and the Ministry of Foreign Affairs (MOFA) issued the Guiding Opinions on Further Guiding and Regulating the Direction of Outbound Investment (hereinafter referred to as the "Guiding Opinions"). According to the Guiding Opinions, the types of outbound investment are divided into three categories: encouraged, restricted and prohibited. PCG Foreign Service believes that the state supports domestic enterprises with the ability and conditions to actively and steadily carry out outbound investment activities, promote the construction of the "Belt and Road", deepen international production capacity cooperation, and drive the domestic advantageous production capacity, high-quality equipment,

Under the current Chinese laws and regulations system, the overseas investment of domestic organizations will generally involve the filing and approval of three major departments, namely, the National Development and Reform Department (including the National Development and Reform Commission and the local development and reform commissions at the provincial level), the competent national commerce department (including the Ministry of Commerce and the local commerce authorities at the provincial level) and the competent national foreign exchange department (including the State Administration of Foreign Exchange and the local foreign exchange authorities at the provincial level). provincial local foreign exchange authorities). In the current practice of outbound investment, the competent commerce authorities and the NDRC are in principle independent of each other in terms of their review of outbound investment, and there is no case of mutual preconditioning, so that they can be reported separately. After obtaining the Certificate of Enterprise's Overseas Investment and the Notification of Filing, the domestic enterprise can proceed with the foreign exchange registration of overseas direct investment. Therefore, the approval and filing of the whole process of overseas investment is crucial.