The most recently updated Foreign Investment Law took effect on 1 January 2020. This is a comprehensive and fundamental set of legal standards for foreign investment activities with unified provisions for the entry, promotion and protection and management of foreign investment.
The new law has replaced the Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises and the Law of the People’s Republic of China on Sino-Foreign Contractual Joint Ventures passed between 1979 and 1990. The changes were made as the previous laws could not address the emerging challenges in foreign investment, including intellectual property rights.
The new law provides foreign investors with more rights and more convenient registration procedures. Most Chinese cities have rolled out favourable policies to attract foreign investment such as offering low cost or even free space for manufacturing, low taxes for the first year, and/or incentives to attract foreign technology transfer.
Analysts expect foreign investment in wood product manufacturing and trade will increase as a result of these changes to the law.