Do you want to know what kind of business you can do in China as expats? Which fields are prohibited for foreign investors? Here is the last Negative List of Foreign Investment In China for your reference.
Special Administrative Measures of China for Admittance of Foreign Investments (Negative List) (2020)
- The Special Administrative Measures (Negative List) on Foreign Investment Access to China (hereinafter referred to as Negative List), lists the special administrative measures for the admittance of foreign investment, including the equity requirements, senior management requirements, etc. The other fields outside of this list shall be managed in accordance with the principle that domestic and foreign investments are equal.
- For some fields, the Negative List includes a transition period to remove or ease the access restrictions. After the expiry of the transition period, the restrictions will be canceled or relaxed on time
- No foreign investor may engage in investment and business activities as an individually-owned business, members of a farmer cooperative.
- Foreign investors are not allowed to invest in the fields prohibited in the negative list. The non-prohibited investment areas included in this negative list shall be granted the access permit for foreign investment. No foreign-funded partnership enterprise shall be established in the fields where equity rights are required.
Ⅰ Agriculture, Forest, Husbandry and Fishery Industry
- The breeding the new varieties of wheat and corn, and the production of its seeds shall be controlled by the Chinese Part
- Forbid to invest in R&D, breeding, plant, and production of Chinese special species (includes the good genes of crops, animals and aquatic breeds)
- Forbid to invest in genetically modified organisms and production of genetically modified crops seeds, animals and aquatic breeds
- Forbid to fish the aquatic productions in sea areas and inland waters within China
Ⅱ Mining Industry
- Forbid to invest the exploration, mining and mineral processing of the Rare Earth, Radioactive Minerals, Tungsten
Ⅲ Manufacturing Industry
- The Printing of publications shall be controlled by The Chinese part
- Forbid to invest the radioactive mineral smelting and separation, and the production of nuclear fuel
- Forbid to invest the processing of traditional Chinese medicines (through steaming, frying, moxibustion, calcination, etc.); and production of traditional Chinese medicine patent drugs with secret formulas
- For the manufacturing of motorcycles: the Chinese part should hold over 50% in equity as joint ventures. One foreign investor may establish up to two equity joint ventures to manufacture motorcycles, but this restriction may not apply to special vehicles and new energy vehicles. By 2020, restrictions on foreign shares in commercial vehicle manufacturing will be lifted. In 2022, the other restrictions will be canceled
- Forbid to invest the production of the facilities and key parts for the ground receiving equipment of satellite TV broadcasting
Ⅳ Electricity, heating, gas and water production and Supply
- The operation of nuclear power stations shall be controlled by the Chinese part
- The construction and operation of the water-supply pipe system in cities with more than 0.5 million populations shall be controlled by the Chinese part
Ⅴ Wholesale & Retail Industry
- Forbid to invest the production, wholesale, retail, import and export of tobacco or ancillary products
Ⅵ Transportation, Warehouse and Postal Industry
- The water transport companies shall be controlled by the Chinese part
- The public airline shall be controlled by the Chinese part; A foreign investor’s participation (including that of its related parties) shall be within 25% and its legal representative has to be a Chinese citizen
- For general airlines, it’s legal representative has to be Chinese citizen. Among them, the agricultural, forestry and fishery general airlines are limited to joint ventures, while other general aviation companies shall be controlled by Chinese part
- The construction and operation of civil airports shall be controlled by the Chinese part
- Forbid to invest the air traffic control
- Forbid to invest the post companies, and also the domestic express service within China
Ⅶ Transmission, Software and Information Technology (IT)
- Telecommunication; radio, TV and satellite transmission(only involved in the field China promise to open when joining WTO). and the Equity in supporting activities(ex. online business service) should be controlled by Chinese part
- Forbid to invest the news websites, online audio-visual program service, venues to provide internet access and internet culture related services (excluding music service)
Ⅷ Financial Industry
- For securities corporation, and the securities investment fund management corporation, the proportion of foreign shares does not exceed 51%. ( In 2021, this rule will be canceled)
- For futures corporation, the proportion of foreign shares does not exceed 51%. ( In 2021, this rule will be canceled)
- For life insurance corporation, the proportion of foreign shares does not exceed 51%. ( In 2021, this rule will be canceled)
Ⅸ Leasing and Business Industry
- Forbid to invest the Law firms in China (except the services to provide information on legal environmental impacts in China), Forbid to be the partner of Chinese law firms
- Market research is only allowed as joint ventures. If in radio and television listening, rating survey, the equity shall be controlled by the Chinese part
- Forbid to invest the social research.
Ⅹ Scientific Research and Technology Industry
- Forbid to invest the development and application of technologies in respect of human stem cells and gene.
- Forbid to invest the research institutes for humanities and social sciences
- Forbid to invest the geodetic surveying, marine charting, aerial photography for surveying and mapping, surveying and mapping of territorial boundaries of dministrative divisions, compiling topographic and common maps and navigation e-maps and surveying and mapping companies
Ⅺ Education
- For preschool, regular high schools, and institutions of higher education, only joint ventures are allowed, which shall be controlled by the Chinese part. ( The president or the top administrator shall be Chinese citizen, and Chinese member in the board of directors should be over 50%)
- Forbid to invest the compulsory education and religious education
Ⅻ Health and Social Activities
- Medical institutions are only allowed as joint ventures
XIII Culture, Sports and Entertainment Industry
- Forbid to invest the news agency
- Forbid to invest the Editing, publishing, and production of books, newspapers, periodicals, audio-visual products, and electronic publications
- Forbid to invest in a radio station, TV station, radio and television frequency channel, radio and TV network and satellite, the installation of radio and TV service, the terrestrial receiving facilities of satellite television broadcasting
- Forbid to invest the radio and television program production and management (including the introduction business) companies
- Forbid to invest the Film production company, distribution company, cinema company, and film import business
- Forbid to invest the auction company that introduces business investment cultural relic auction, cultural relics shops, and state-owned cultural relics museums
- Forbid to invest the theatrical performance group
