Comments to NPC on the Foreign Investment Law (Draft)

2019-02-22 | All chapters

On February 22, the European Chamber, on behalf of members companies, submitted the collated Comments on the draft Foreign Investment Law to the Standing Committee of the National People’s Congress (NPCSC). The Comments are based on the first review draft of the Foreign Investment Law published on December 26, 2018. 

The European Chamber notes the efforts to improve the situation for foreign companies doing business in China. Specifically, unifying the three different legal foundations under which foreign companies register into a single definition and highlighting many of the challenges faced by foreign businesses in the China market are both viewed positively. However, a simplified legal regime that nevertheless continues to draw a legal distinction between foreign and local companies remains problematic at the most basic level. Aside from distinctions drawn for legitimate purposes, such as national security concerns, the European Chamber calls for a complete abolition of the legal differentiation of foreign companies. Furthermore, the very broad and/or vague language used in many of the articles and the fact that many of them resemble policy commitments rather than legal clauses needs to be clarified.