According to the Interim Measures for the Administration of Examination and Approval of Overseas Investment Projects (Order NO.21  of the National Development and Reform Commission), overseas investment project shall refer to the activities by which an Investment Entity obtains overseas ownership, operation and management rights or other relevant rights through the injection of assets and rights such as currency, negotiable securities, physical objects, intellectual property rights or technology, equity or claims, or through the provision of security. There are five aspects as follows:
1. Investors. The investors who carry out overseas investment shall be divided into two categories.
The first type of investors are legal persons in the People’s Republic of China, including various enterprises, entities and departments with state authorized investment and public institutions. These entities are legal person entities in the territory of the People’s Republic of China and shall be subject to the laws of the People’s Republic of China. The other type of investors are overseas enterprises or entities with Chinese investors as controlling shareholders. These entities in China carry out overseas investment through overseas enterprises or entities. Those overseas enterprises or entities are not Chinese legal person entities and shall not subject to the laws of the People’s Republic of China. When Chinese entities carry out overseas investment through overseas enterprises or entities, shall follow relevant polices and regulations on approving and examining enterprises’ investment projects and complete the formalities accordingly. In line with international practice, natural person who is qualified to invest in China could also carries out overseas investment.
2. Investment areas. The investment areas applicable for the approval of overseas investment projects not only include foreign countries, bust also Hong Kong and Macao Special Administrative Regions and Taiwan Region. Any investment conducted outside Chinese Mainland shall be regarded as overseas investment.
3. Forms of contribution. The forms of contribution of overseas investment could be extensive, including the financial asset investment such as money funds, stocks, bonds and trust certificate, material asset investment and intangible asset investment such as intellectual property and patterned technologies. Any form of outbound asset investment shall be required to complete administrative formalities according to relevant regulations for approving and examining overseas investment projects.
4. Forms of investment. Investment forms include the initial investment and reinvestment of new establishment and rebuilt projects, equity investment activities such as acquisition, merger, purchase of stocks and capital investment, and provision of collateral for overseas investment.
5. Purposes of investment. Through overseas investment, investors acquire the ownership of overseas assets or business operation, the right of operation management and other relevant rights, such as distribution of profits, asset management, resource exploration or development and so on. The purposes of overseas investment can be either overseas production, sale, operation or research and development, or overseas financing.
6. Fields of investment. All fields of national economy which are open for investment according to Chinese laws are also open for overseas investment.