The new regulations on foreign investment will be implemented today to safeguard enterprises' 'going global'
On July 1st, the "Regulations of the State Council on Outward Investment" (hereinafter referred to as the "Regulations") officially came into effect. This is the first administrative regulation in the field of foreign investment in China.
In recent years, the scale of China's outward investment has continued to expand. According to data from the Ministry of Commerce, by the end of 2025, China will have established over 50000 enterprises overseas, covering 190 countries and regions. The stock of outbound investment has remained among the top three in the world for nine consecutive years.
Faced with the increasingly large scale of overseas investment, the urgency of compliance in foreign investment is becoming more prominent. Zhang Jun, Chief Economist of China Galaxy Securities, told Securities Daily reporters that the release of the "Regulations" marks a new stage of systematization and rule of law in China's foreign investment governance. On the one hand, the Regulation integrates and enhances the previously scattered regulatory rules, while also strengthening international compatibility; On the other hand, the Regulations provide institutional systematization and policy certainty to safeguard investors' long-term planning. A high level of legal effectiveness helps stabilize investors' policy expectations, and improving the foreign investment service system helps to enhance the efficiency of overseas investment.
The Regulation has expanded the scope of foreign investment supervision, upgrading from partial supervision to comprehensive governance of the entire subject, behavior, and chain. Meanwhile, "going global" enterprises need to initiate compliance procedures from an earlier stage.
Guo Peng, Managing Partner of PwC China Tax Market, told Securities Daily reporters that in the future, when companies conduct overseas investments, they should evaluate the full compliance requirements of investment access, capital outflow, technology export, cross-border data flow, security review, and post investment management at the early stage of the transaction, and fulfill relevant legal procedures in accordance with the law.
The Regulation further strengthens the rigid constraints on foreign investment supervision, clearly stipulates corresponding legal responsibilities and punishment measures for different types of illegal and irregular behaviors, and significantly increases the cost of enterprise violations.
Previously, some companies believed that as long as they did not directly export equipment and software, transferring technology through personnel exchanges, technical training, and other means would not trigger export controls. After the implementation of the Regulations, such "gray areas" will be completely blocked, and the Regulations will "embed" existing export control compliance obligations into foreign investment activities.
Regarding this, Yu Yuting, partner and head of the International Legal Affairs Department at Guangdong Luoyang Law Firm, stated that on the one hand, enterprises should strictly comply with the national requirements for products, technologies, and project management that are prohibited or restricted from export. For areas involving strategic resources, key technologies, sensitive equipment, and areas where the country explicitly prohibits or restricts foreign investment, they should carefully evaluate investment compliance and avoid crossing regulatory bottom lines. On the other hand, enterprises need to strengthen the identification and evaluation of technological attributes, end uses, and potential national security impacts, in order to prevent risks such as investment obstruction, transaction termination, or facing regulatory penalties due to lack of compliance.
In the view of Lv Zhuo, equity partner of Beijing Jingshi Law Firm, whether it is cross-border mergers and acquisitions in cutting-edge technology fields or equity transfers in strategic resource fields, security reviews cannot be bypassed. When planning overseas investments, enterprises should incorporate security review as an equally important prerequisite procedure as approval and filing into their transaction structure design, moving from "remedial measures after the fact" to "preventive measures before the fact", and from "passive response" to "active management".
The Regulation clarifies that the country should improve its comprehensive overseas service system, promote the integration of trade and investment, and improve institutional measures from multiple dimensions to provide strong legal guarantees for overseas enterprises to participate in international cooperation and competition.
Relevant institutions are also taking active actions. On June 30th, Wang Yifei, spokesperson for the China Council for the Promotion of International Trade (CCPIT), stated at the regular press conference in June that as an important component of the national overseas comprehensive service system, CCPIT has established a special working mechanism to serve overseas investment and coordinate high-quality services for "overseas" enterprises in the national trade promotion system.
In Zhang Jun's view, as Chinese enterprises continue to accelerate their "going global" pace, relevant institutional arrangements can help enhance their ability to respond to changes in host country policies, investment disputes, and operational risks, enhance the security of overseas assets and investment returns, and reduce the uncertainty of cross-border operations.
From the comprehensive improvement of the regulatory framework to the systematic construction of the service system, from the clear delineation of compliance red lines to precise guidance for enterprise operations, the implementation of the "Regulations" not only sets a clear compliance route for "going global" enterprises, but also writes a solid footnote for China's high-level opening-up to the outside world through institutionalized rights protection mechanisms and full process service guarantees.