What do multinational corporations, private equity funds, and other foreign investors need to know?

On March 15, 2019, the National People’s Congress of China approved The People’s Republic of China Foreign Investment Law (FIL) which will come into force on January 1, 2020, replacing and updating China’s various existing laws regulating foreign direct investment and foreign invested entities (FIEs) with a single unified law. In promulgating the FIL the Chinese government aims to promote foreign investment by better protecting the rights and interests of foreign investors and standardizing management of foreign investment. As discussed below, the FIL offers welcome and long-awaited improvements to existing laws and regulations governing foreign direct investment and FIEs, but as is often the case with new legislation in China, a number of areas will need to be addressed through amendments to existing legislation, in detailed implementing regulations and in practice.