Enterprise Services
Overseas Direct Investment (ODI) Filing
ODI filing refers to the three-step process required for Chinese enterprises or organizations investing in countries or regions outside mainland China (including Hong Kong, Macao, and Taiwan) through establishing new enterprises, mergers and acquisitions, or acquiring equity stakes in foreign enterprises: obtaining approval for overseas investment activities from the commerce department, securing approval or filing for overseas investment projects with the National Development and Reform Commission (NDRC), and completing foreign exchange registration with banks. Enterprises involving state-owned assets must also obtain approval from the State-owned Assets Supervision and Administration Commission (SASAC).
ODI licensing and filing procedures are categorized into the filing system and the approval system based on factors such as investment amount, industry, and country. Generally, non-significant investment amounts or non-sensitive investments fall under the filing system. For sensitive industries, sensitive regions, and investments exceeding a certain threshold, approval from the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) is required.
Conditions for Filing Overseas Direct Investment (ODI)
Enterprises must meet the following conditions to file for overseas investment:
Meets the definition of “overseas investment”
The act of establishing new entities, acquiring existing ones, or otherwise obtaining non-financial enterprises or related interests overseas.
Entity and Establishment Time Requirements
The principal entity shall be a legally established domestic enterprise, preferably with at least one year of operation.
Shareholder background, source of funds, and investment authenticity requirements
The background of domestic shareholders or partners, the source of funds, and the authenticity of overseas investment projects must be clearly stated.
Financial Requirements
The most recent annual audit report must show no losses, with a return on net assets exceeding 51% and a debt-to-equity ratio below 70%.
Overseas Direct Investment (ODI) Filing Process
When conducting overseas direct investment (ODI), enterprises must undergo the approval and filing procedures of the following three departments:
1. National Development and Reform Commission Project Approval
First, domestic enterprise shareholders must apply to the National Development and Reform Commission (NDRC) for project approval. During this process, enterprises must submit relevant project information and sign the required legal documents. The NDRC oversees the industry flow of enterprises' overseas investments and issues the "Overseas Investment Project Filing Notice" to eligible enterprises.
2. Ministry of Commerce approval and licensing
Subsequently, enterprises must submit an application for approval to the Ministry of Commerce. The Ministry of Commerce is responsible for conducting comprehensive reviews of enterprises' overseas investment matters and issuing the "Enterprise Overseas Investment Certificate" to eligible enterprises. Upon receiving this certificate, enterprises must commence overseas investment activities within two years.
3. Filing with the State Administration of Foreign Exchange
Finally, enterprises must file with the State Administration of Foreign Exchange (SAFE). SAFE oversees foreign exchange registration and procedures for capital outflows. After completing the filing process, enterprises must complete foreign exchange registration procedures at a bank in accordance with the "Regulations on Foreign Exchange Administration for Overseas Direct Investment by Domestic Institutions." For projects exceeding USD 5 million in investment, enterprises must also report to SAFE. Following SAFE's review, the "Certificate of Foreign Exchange Registration for Overseas Direct Investment" will be issued to the domestic enterprise.
