China to Revise ODI Regulations
The State Council of the PRC released the Regulation on Outbound Investment (State Council Decree No. 837) on1 June 2026, which provides a comprehensive framework for the administration and supervision of outbound investment activities conducted by enterprises, other organizations, and individual residents within China. After the said regulation came into effect on 1 July 2026, the National Development and Reform Commission of the PRC released a revised draft of the Measures for the Administration of Outbound Investment for public comment on 21 August 2026.
According to the released draft for public comment, the revisions made by the National Development and Reform Commission to the current Measures for the Administration of Outbound Investment of Enterprises (National Development and Reform Commission Decree No. 11 of 2017) mainly include:
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The outbound investment of individual Chinese residents is included in the supervision scope. It is stipulated that if the investor is an individual resident, the ODI filing authority is the provincial development and reform authority of the investor's place of registered permanent residence or habitual residence. (Article 13 of the draft for public comment)
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The threshold of USD300 million for overseas reinvestment reports has been removed. All non-sensitive outbound investments (including round-trip investments to China) conducted by overseas enterprises and other organizations must submit an overseas reinvestment report to the development and reform authority 20 working days before the implementation of the investment. (Article 14 of the draft for public comment)
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It is stipulated that security review is required for foreign investments, transfer and disposal of related assets and rights that may affect or potentially affect national security. (Article 15 of the draft for public comment)
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Preliminary work report requirement has been added. It is stipulated that if the Chinese investment is USD100 million or more, or relates to China's diplomatic relations with relevant countries, it must submit a preliminary work report to the development and reform authority at least 10 working days before carrying out important preliminary work, such as making investment commitments to foreign governments, signing investment agreements, etc. (Article 41 of the draft for public comment)
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In the event of significant adverse circumstances, such as foreign countries or regions demand Chinese entity to provide technology, data, or transfer and disposal of assets and interests, that threaten national security, investors must immediately submit a report of significant adverse circumstances to the development and reform authority. (Article 53 of the draft for public comment)
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Annual report requirement has been added. It is stipulated that investors must submit an annual report on outbound investment to the development and reform authority before March 31 each year. (Article 54 of the draft for public comment)
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Strengthen the penalties and implemented the penalty measures for violations as stipulated in Article 27 of the State Council's Regulations on Outbound Investment (State Council Decree No. 837). (Chapter 5 of the draft for public comments)
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It has been clarified that investors who invest in overseas financial markets through qualified domestic institutional investors, Hong Kong Stock Connect, Cross border Wealth Management Connect, etc. are not applicable for ODI approval and filing except in cases where the investor obtains control of the invested enterprise or the proportion of its equity or voting rights reaches an integer multiple of 10% as a result. (Article 73 of the draft for public comment)
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