With the implementation of the Foreign Investment Law of the People’s Republic of China and its Implementing Regulations on January 1, 2020, China’s legal framework for foreign investment has undergone significant reform. The foreign investment information reporting system, as a key mechanism supporting the pre-establishment national treatment plus negative list approach, provides a statutory foundation for transparency, regulatory oversight, and optimized government services in the foreign investment regime.
Understanding and fulfilling this information reporting obligation is fundamental for foreign-invested enterprises (FIEs) seeking to operate lawfully and compliantly in China.
I. Legal Basis #
1. Foreign Investment Law (Promulgated January 2019, Effective January 1, 2020) #
Article 34 provides:
“The State shall establish a foreign investment information reporting system. Foreign investors or foreign-invested enterprises shall submit investment information to the competent commerce department through the enterprise registration system and the enterprise credit information publicity system.
The content and scope of the information to be reported shall be determined in accordance with the principle of necessity; where such information can be obtained through inter-departmental information sharing, it shall not be required to be reported again.”
2. Implementing Regulations for the Foreign Investment Law (Effective January 1, 2020) #
Article 39 provides:
“The content, scope, frequency, and procedures of the foreign investment information reporting shall be determined and published by the competent commerce department of the State Council in coordination with the market regulation department and other relevant departments, based on the principles of necessity, efficiency, and convenience.
The commerce and other relevant departments shall strengthen information sharing, and shall not require duplicate submission of information already accessible via inter-departmental sharing.
Information reported by foreign investors or FIEs must be truthful, accurate, and complete.”
3. Measures for Foreign Investment Information Reporting (Order No. 2 of 2019, Issued by MOFCOM and SAMR, Effective January 1, 2020) #
Article 4 provides:
“Foreign investors or foreign-invested enterprises shall report investment information to the competent commerce department via the enterprise registration system and the National Enterprise Credit Information Publicity System (NECIPS).
Market regulation authorities shall promptly forward the investment information reported by foreign investors and FIEs to the competent commerce department.
MOFCOM shall establish a foreign investment information reporting system to receive and process information shared by market regulation departments and other sources.”
This regulation constitutes the primary implementation document governing the scope, methods, content, and standards for information reporting by foreign investors.
II. Reporting Systems and Report Types #
1. Reporting Channels #
Foreign investors must submit investment information online via:
The Enterprise Registration System (for establishment, changes, and deregistration); and
The National Enterprise Credit Information Publicity System (NECIPS) for annual reports.
Link: https://www.gsxt.gov.cn/
2. Initial Report #
Timing: Upon completing registration of a foreign-invested enterprise.
Content: Includes basic corporate details, investor information, capital contribution data, business scope, and industry classification.
3. Change Report #
Timing:
- If the change triggers registration (or record-filing), the change report must be submitted at the time of registration.
- If no registration is triggered, the change report must be submitted within 20 working days from the date of the change.
Content: Includes updates to investor information, beneficial ownership, transaction data, and any other material changes.
4. Deregistration Report #
Timing: Submission is deemed completed once the deregistration (or related change) is filed with the registration authority; no separate report is required.
Content: Basic information about the company’s deregistration, liquidation process, and asset/liability settlement.
5. Annual Report #
Timing: Between January 1 and June 30 of each year for the preceding fiscal year.
Content:
- Basic company information;
- Investor and ultimate controller information;
- Business operations and financial status;
- Licensing status (if the enterprise is subject to restrictive measures in the foreign investment negative list).
III. Consequences of Non-Compliance #
1. Enforcement Measures and Sanctions #
Failure to comply with the information reporting obligations—such as failure to report, inaccurate, or false information—may result in:
① Rectification Orders #
Authorities (market regulation or commerce departments) may issue a notice requiring correction within a specified period.
② Administrative Penalties #
If the enterprise fails to rectify, penalties under the Foreign Investment Law, the Information Reporting Measures, and the Provisional Regulations on Enterprise Information Disclosure may apply:
- Fines ranging from RMB 100,000 to RMB 500,000;
- Possible escalation of supervision and additional restrictions.
③ Public Disclosure and Credit Sanctions #
Failure to submit or correct annual reports may result in:
Public disclosure of the violation on NECIPS;
Inclusion in the list of enterprises with abnormal operations, potentially affecting:
- Eligibility for public procurement,
- Bidding qualifications,
- Access to policy incentives.
Noncompliance follows a tiered enforcement model, escalating from rectification to administrative punishment and public credit sanctions. FIEs are strongly advised to strictly adhere to the reporting requirements to maintain a favorable compliance record in China.
2. Statutory Sanctions #
Foreign Investment Law – Article 37 #
“Where a foreign investor or a foreign-invested enterprise fails to submit investment information in accordance with the foreign investment information reporting system, the competent commerce department shall order rectification within a specified period; if the violation is not corrected, a fine of not less than RMB 100,000 and not more than RMB 500,000 shall be imposed.”
Measures for Foreign Investment Information Reporting – Article 25 #
Provides a tiered fine system:
Basic fine: RMB 100,000 to RMB 300,000 for failure to correct after notification;
Enhanced fine: RMB 300,000 to RMB 500,000 for aggravated circumstances, including:
- Intentional evasion of reporting obligations;
- False, misleading, or concealed information;
- Errors regarding industry classification or involvement in restricted sectors;
- Repeat violations within two years;
- Other serious circumstances as determined by MOFCOM.
Provisional Regulations on Enterprise Information Disclosure (2024 Amendment, State Council Order No. 777, Effective May 1, 2024) #
Foreign investment reporting is now incorporated into the unified enterprise information disclosure framework.
Article 18 provides:
Failure to disclose annual reports or required information may lead to:
- Inclusion in the list of enterprises with abnormal operations;
- License revocation if the entity fails to rectify within two years and cannot be contacted at its registered address.
For false or deceptive disclosures:
- Fine of RMB 10,000 to RMB 50,000;
- In serious cases: RMB 50,000 to RMB 200,000, blacklisting, and license revocation;
- Key personnel of blacklisted entities are barred from acting as legal representatives for other companies for three years.
Conclusion #
The foreign investment information reporting obligation is a critical compliance requirement under China’s legal framework for foreign investment. Timely, accurate, and complete fulfillment of this obligation helps foreign-invested enterprises reduce compliance risks, minimize regulatory costs, and maintain a strong reputation in the Chinese market.
Failure to comply may result in administrative penalties, loss of credit standing, and enhanced regulatory scrutiny. Foreign investors are therefore strongly encouraged to understand the legal basis and practical requirements of the reporting regime, and to ensure proper implementation and internal controls in daily operations.
This article is for informational purposes only and does not constitute legal advice. For case-specific consultation, please contact us. Read our full Legal Disclaimer, which also includes information on translation accuracy.
