Provincial-level branches of the Ministry of Commerce (MOFCOM) (including branches in "deputy-provincial-level cities" such as Chengdu and Xian) were authorized on 10 June 2010 to approve "encouraged" and "permitted" foreign investment projects with a total investment of up to US$300 million.
Previously, provincial-level branches could only approve investments of up to US$100 million for encouraged and permitted projects. "Restricted" foreign investment projects with a total investment of more than US$50 million still requires MOFCOM approval. MOFCOM's delegation follows the recent corresponding delegation of the National Development and Reform Commission, as reported in our e-bulletin dated 31 May 2010.
Subject to other regulatory requirements, provincial-level branches of MOFCOM may also specifically approve:
- the establishment of (i) foreign-invested China holding companies with a registered capital of up to US$300 million and (ii) foreign-invested venture capital investment enterprises and venture capital investment management enterprises with total capital of up to US$300 million;
- changes to "encouraged" and "permitted" FIEs originally approved by MOFCOM (or its predecessor), except for total investment increases of US$300 million or more;
- the establishment and changes of "encouraged" FIEs that are not subject to comprehensive State balancing, even for total investment amounts exceeding US$300 million; and
- the establishment and change of FIEs engaged in certain service-sector activities (not including finance and telecommunications), even for total investment amounts exceeding US$300 million.
With provincial-level approvals typically being easier to obtain, MOFCOM's recent delegation of approval authority should make it easier for some foreign investors.