State-owned Assets Supervision and Administration Commission of the State Council, Tentative Measures for Regulation of Overseas Investments of Enterprises Directly under the Central Government

Promulgated: March 18 2012
Effective: May 1 2012

Applicability: For the purposes of these Measures, the term “overseas investment” means the act whereby an enterprise directly under the central government (an Enterprise) or a subsidiary at any level that is wholly owned by it or in which it has a controlling interest (a Subsidiary) invests in fixed assets, equity, etc. outside China or in the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan (Article 2).

Main contents: In principle, an Enterprise may not engage in investment in businesses other than its principal business. If such an investment genuinely needs to be made due to a special reason, the approval of the State-owned Assets Supervision and Administration Commission of the State Council (Sasac) shall be required. The Enterprise shall submit the following approval materials to Sasac:

(1) a request for instructions on applying for approval to invest in a business other than its principal business;

(2) the relevant decision documents of the Enterprise concerning the non-principal business investment project;

(3) relevant documents, such as the feasibility study report and due diligence for the investment project;

(4) a risk assessment, risk control and risk prevention report for the investment project; and

(5) other necessary materials (Article 10).