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China Matters: China Issues Rules on Foreign Invested Partnerships

December 04, 2009

By David S. Wang

On December 2, 2009, the State Council released the Administrative Measures for the Establishment of Partnership Enterprises by Foreign Entities or Individuals in China (the Measures). Unlike the draft of the Measures (the Draft) which we discussed in our September 2009 issue of China Matters, formation of a foreign invested partnership (FIP) will not require approval by the Ministry of Commerce (MofCom), but will now only require registration with the State Administration of Industry & Commerce (SAIC). Consistent with the Draft, however, all FIPs are still subject to foreign investment restrictions for various industries. Finally, in these Measures, the State Council defers promulgation of rules on the formation of foreign invested RMB funds in the form of partnerships, which is one of the most closely watched issues in the market.

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