Recently, the State Council has issued the Circular on Several Measures to Boost the Growth of Foreign Investment (the

Release time：2017.08.17

Recently, the State Council has issued the Circular on Several Measures to Boost the Growth of Foreign Investment (the "Circular").
The Circular rolls out 22 pieces of policies in five aspects to promote the growth of foreign investment, including further reducing market access restrictions for foreign capital, making fiscal and taxation support policies, and improving all-around investment environment in national-level development zones. The Circular specifies that China will fully implement the pre-entry national treatment and the negative list administrative system, and expand market access to allow foreign capital to enter certain sectors, such as the manufacturing of special purpose vehicles and new-energy vehicles, business premises for internet services, banking sector, securities sector, and insurance sector. In addition, the Circular sets forth that foreign investors are encouraged to expand their investment scale in China, and profits obtained by foreign investors from resident enterprises within the territory of China but directly reinvested by them in encouraged investment projects will be entitled to the tax deferral policy, meaning that these profits are exempted from the withholding tax temporarily, provided that relevant requirements are fulfilled. Furthermore, the Circular calls for efforts to improve the legal system for foreign capital, in a bid to guarantee foreign investors' freedom to transfer their profits overseas and provide better protection of intellectual property rights owned by foreign-invested companies.

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