Outbound investment, or overseas direct investment (ODI), has become an important way for Chinese enterprises to expand globally in recent years. However, with China’s foreign exchange control getting stringent, conducting outbound investment legally and compliantly has become crucial. This article will analyze key policies and procedures regarding ODI, introduce main regulatory bodies, and provide actionable suggestions to ensure legal compliance when making outbound investments.

ODI regulatory policies issued by NDRC, MOFCOM and SAFE
The National Development and Reform Commission (NDRC), Ministry of Commerce (MOFCOM), and State Administration of Foreign Exchange (SAFE) are the three main regulatory bodies for China’s outbound investments. Key regulations include: 1) Measures for the Administration of Overseas Investment issued by NDRC; 2) Measures for the Administration of Overseas Investment issued by MOFCOM; 3) Notice on Issues Concerning Foreign Exchange Administration of Overseas Investment and Financing and Round-trip Investment by Domestic Residents Through Special Purpose Vehicles issued by SAFE. These regulations provide clear guidance regarding encouraged, restricted and prohibited industries and countries for outbound investment. Enterprises must obtain proper approval from relevant authorities before transferring funds overseas.
Approval and filing procedures for outbound investment projects
The approval and filing procedures for outbound investments generally involve: 1) Obtaining approval from NDRC for the investment project; 2) Getting an overseas investment certificate from MOFCOM; 3) Registering the foreign exchange under the investment with SAFE; 4) Transferring funds overseas through authorized banks. Different requirements apply based on factors including investment scale, industry and target country. Enterprises should carefully evaluate compliance requirements beforehand.
Tips to ensure ODI compliance
To ensure full compliance, enterprises making outbound investments need: 1) Select encouraged or permitted industries and countries; 2) Provide true and complete materials to authorities; 3) Finish all required approval and filing procedures; 4) Use legitimate sources for overseas investment funds; 5) Submit post-investment reports as required. It’s also advisable to engage professional agents to ensure smooth completion of ODI compliance procedures.
With stricter regulation of outbound investment, compliance has become crucial. Enterprises need to follow ODI policies issued by NDRC, MOFCOM and SAFE, and complete all required approval and filing procedures. This will mitigate risks and ensure sustainable overseas expansion.