Recently, the Regulations on the Protection of Investors in Qianhai Co-operation Zone of the Shenzhen Special Economic Zone (hereinafter referred to as the “Regulations”), which were deliberated and passed by the Standing Committee of the Seventh Municipal People’s Congress at its twenty-first meeting, were formally announced. The Regulations, as the first regional investor protection legislation in China, is the top-level design of the investor rights and interests protection system in Qianhai, which will buttress the international high-standard investment, economic and trade rules, take the lead in implementing the State Council’s deployment of a high-level systematic opening up, and formulate innovative initiatives in the areas of investment facilitation, protection of rights and interests, optimisation of supervision, and safeguard of the rule of law, etc., which will further enhance the confidence of domestic and foreign enterprises in investing in Qianhai and will be helpful for helping Qianhai build a market-oriented, rule-of-law and international business environment is of great significance. The Regulation will be implemented on 1 December 2023.
Benchmarking international investment, economic and trade rules to make investors feel more comfortable in Qianhai
In September 2021, the CPC Central Committee and the State Council issued the “Comprehensively Deepening the Reform and Opening-up Programme of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone” (hereinafter referred to as the “Qianhai Programme”), mentioning that Qianhai is required to establish and improve a new system of open economy at a higher level, and to create a first-class business environment in the international arena and explicitly put forward the idea of “making use of Shenzhen’s Special Economic Zone’s legislative power to study and formulate regulations on investor protection in Qianhai Cooperation Zone, and improve foreign capital and private investment and trade rules. It is also clearly stated that “make good use of the legislative power of the Shenzhen Special Economic Zone, study and formulate regulations for the protection of investors in Qianhai Cooperation Zone, and improve the mechanism for the protection of the rights and interests of foreign investors and private enterprises.
The early and pilot implementation of investor protection special legislation in Qianhai, to explore replicable and scalable investor protection system, not only to implement the national major decisions and deployments, but also to promote Qianhai to create a more internationally competitive investment environment, to achieve a higher level of reform and opening up of Qianhai in the new starting point of the rule of law to provide protection.
It is worth mentioning that the Regulations closely follow the requirements of the Qianhai Programme, focusing on a series of ideas such as not repeating the provisions of the previous law, highlighting the specific needs of investor protection in Qianhai, and promoting the innovation of the investor protection system in Qianhai, and benchmarking the provisions on investor protection in the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and the World Bank’s “Business Environment for Business” (“BEE”). BEE) of the World Bank on investor protection, and actively converge with global investment rules, so that investors can feel more assured, comfortable and confident.
Contributing to the opening and facilitation of investment and safeguarding the legitimate rights and interests of investors in accordance with the law
The Regulation clearly establishes and implements the market permit commitment that is to enter the system, for the specific industry licensing business projects, market players who make a written commitment to meet the requirements and submit the necessary materials can obtain administrative licences, greatly simplifying the licensing business approval. In terms of improving investment policy guidelines, the Qianhai Management Bureau is required to compile, publish and dynamically adjust the key investment industry guide catalogue, classify and accurately push investment preferential policies, optimise the implementation mechanism of enterprise-friendly policies, and realise the “application-free and enjoyment” of enterprise-friendly policies.
Regarding the protection of rights and interests in the field of international economic and trade exchanges, on the one hand, the Regulations provide for the free remittance of foreign investors’ funds without delay, and provide efficient and convenient cross-border capital settlement services for qualified enterprises in Qianhai to carry out new types of offshore international trade, etc. On the other hand, the Regulations stipulate that Qianhai is the only place where foreign investors can freely transfer their funds to and from China. On the other hand, the Regulations stipulate that when enterprises in Qianhai Cooperation Zone are affected by foreign discriminatory restrictive measures, the Qianhai Management Bureau will provide assistance to enterprises in coping with the foreign discriminatory restrictive measures. At the same time, the Qianhai Management Bureau shall regularly assess the protection of investors’ legitimate rights and interests, satisfaction assessment, monitoring of the burden on enterprises, and improvement of the investment environment, etc. on an annual basis.
In addition, the Regulations also make it clear that the Qianhai Management Bureau will work with relevant departments to formulate a list of administrative coercive measures not to be implemented in terms of safeguarding the legitimate business rights of enterprises, and in terms of complaint handling, it will lay out the construction of sites for the protection of investment rights and interests, so as to effectively safeguard the legitimate rights and interests of market players.
Innovative fair competition review mechanism, strengthen the business environment and the rule of law protection
The Regulations insist on deepening the reform of “release management and service”, optimising the mode of supervision and enforcement, promoting enterprises to operate in compliance with the law, and innovating the fair competition review mechanism, explicitly setting up the Fair Competition Commission in Qianhai as a deliberative and coordinating body, establishing a centralised and independent review system of fair competition, and promoting the change of the mode of review of fair competition from self-review to centralised and independent review, as well as improving the fair competition review mechanism. centralised and independent review, and enhance the specialisation and refinement of the fair competition review.
On the other hand, in order to facilitate the creation of a fairer and more equitable environment under the rule of law in Qianhai, the Regulations have made provisions for strengthening the construction of the legal service system, improving the mechanism for the settlement of civil and commercial disputes, enhancing exchanges and cooperation in the field of dispute settlement, and promoting the courts to improve the rules of adjudication.
Among them, Qianhai will continue to actively build the “Qianhai Shenzhen-Hong Kong International Legal Zone”, support domestic and overseas law firms to carry out joint ventures in the Qianhai Cooperation Zone, and cultivate the development of various types of legal service organisations, so as to provide diversified legal services for enterprises and investors. At the same time, it will improve the mechanism for resolving civil and commercial disputes, and encourage various industry associations and chambers of commerce to set up industry-specific and professional counselling centres.
