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FDI: Entry and ownership rule
On the 17th of January 2017, the State Council of the PRC released a plan that shed some light on the announcement in December 2016 that Li Keqiang had chaired a top-level State Council meeting, in which it was agreed to increase leniency on foreign firms wishing to invest in the PRC.
The January plan announces that restrictions on various investment activities, such as banking, securities, futures, mutual funds and insurance, will be relaxed, as well as the 'opening up' of investment opportunities in several other sectors (e.g. mining, service, green technology, etc.).
In the Plan, the State Council encourages the relevant administrative bodies to reduce the amount of bureaucratic red tape surrounding the set-up and operations of foreign businesses in the PRC, for example, specifically attracting foreign multinationals to open up regional headquarters, procurement centres, etc.
As well as these administrative relaxations, the Plan also calls for the reduction in corporation tax for foreign businesses, specifically in the central and western regions of the PRC, as well as the general prioritisation of these areas for foreign investment. In response, a February 2017 announcement was released about FDI priorities in these regions; see related measure for more information.
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