China is broadening and tightening its outbound direct investment (ODI) rules. On 21 August 2026, China’s National Development and Reform Commission (NDRC) released the Measures for the Administration of Outbound Investment (Revised Draft for Public Comment). The draft is intended to replace the 2017 rules. It would also implement the State Council’s Regulations on Outbound Investment, which took effect on 1 July 2026.
At the date this article was first published in September 2026, these measure remained a consultation draft with no effective date. Until the final measures take effect, investors should continue to follow the applicable current rules while monitoring the final version.
Why China is revising its outbound investment measures
The existing NDRC framework was introduced through the Measures for the Administration of Overseas Investment by Enterprises, issued in December 2017 and effective from 1 March 2018. Those rules were designed principally for outbound investment by enterprises. Direct outbound investment by domestic natural persons generally fell outside their scope, although investments made through controlled offshore entities were covered.
The State Council’s 2026 regulations now provide a higher-level legal framework for outbound investment by domestic enterprises, other organisations and resident individuals. They also address national security review, export control, cross-border transfers of technology, services and data, risk monitoring, investor protection and legal liability.
The NDRC draft translates that broader framework into project-level procedures. Its 76 articles cover approval, filing, overseas reinvestment reports, ongoing information reporting, investor protection, supervision and penalties.
How China’s outbound investment (ODI) approval regime works
China regulates outbound investment through three layers of approval. The procedures depend on the investor, destination, industry, transaction structure and source of funding.
For most mainland enterprises making a direct investment overseas, three regulatory tracks are especially relevant:
- NDRC project approval or filing. The development and reform authorities examine the outbound investment project. Sensitive investments require approval, while direct non-sensitive investments generally follow a filing procedure. The NDRC framework also governs project changes and continuing reports. The revised measures discussed in this article relate primarily to this part of the regime.
- MOFCOM approval or filing. The Ministry of Commerce and provincial commerce authorities administer the establishment or acquisition of overseas enterprises by mainland enterprises. Under the existing MOFCOM measures, sensitive investments require approval and other investments generally follow a filing procedure. An enterprise receives an Enterprise Overseas Investment Certificate after completing the applicable process.
- Foreign exchange registration and remittance. Once the relevant outbound investment documents are in place, the investor normally handles foreign exchange registration and the remittance of investment funds through a qualified bank. Since reforms introduced in 2015, banks have handled direct investment foreign exchange registration, subject to the foreign exchange authorities’ continuing supervision.
These tracks are related, but they are not interchangeable. Completing an NDRC filing does not remove the need to consider the MOFCOM and foreign exchange procedures. The sequence and required documents may also differ for financial institutions, state-owned enterprises, regulated industries and resident individuals.
Other rules may apply alongside the core ODI procedures. Depending on the transaction, investors may need to address state-owned asset supervision, merger control, tax, anti-money laundering, export controls, technology export restrictions, cybersecurity, data transfers and the use of personal information. The 2026 State Council regulations expressly place several of these matters within the broader outbound investment compliance framework.
The Chinese procedures are only one side of the transaction. The investor must also comply with the destination jurisdiction’s foreign investment screening, merger control, licensing, employment, tax and company-law requirements. An effective project plan therefore needs to coordinate mainland approvals and reporting with the closing requirements in the destination country or region.
Eight proposed changes to China’s outbound investment rules
1. Resident individuals would enter the formal NDRC filing framework
The draft defines “investors” to include domestic enterprises, other organisations and resident individuals. For a resident individual’s direct non-sensitive outbound investment, the filing authority would be the provincial development and reform department where the individual has household registration or habitual residence. Sensitive investments would remain subject to NDRC approval.
This is a material change from the 2017 measures, under which direct outbound investment by domestic natural persons was expressly excluded.
It does not mean that every purchase of an overseas security would require an NDRC filing. Investments made through recognised channels such as QDII, Stock Connect and Cross-boundary Wealth Management Connect would generally remain outside the approval, filing and reporting provisions. The draft creates exceptions where the investment gives the investor control, takes the investor and its concert parties to a 10% multiple of equity or voting rights, or falls within another category specified by the NDRC.
Resident individuals with offshore companies, holding platforms, trusts, funds or significant overseas shareholdings should nevertheless prepare for greater scrutiny of the ownership structure, source of funds, outbound remittance route, tax position and beneficial ownership.
2. Sensitive vs non-sensitive investment: NDRC approval, filing and the USD 300 million threshold
Sensitive outbound investments would continue to require NDRC approval before implementation. The draft retains familiar sensitive-country and sensitive-industry categories, including countries or regions without diplomatic relations with China, places affected by war or civil unrest, and industries such as weapons, cross-border water resources and news media. The NDRC may publish a separate catalogue of sensitive industries.
Direct non-sensitive investments would continue to follow a filing route. The filing authority would remain the NDRC for centrally managed enterprises and for local-enterprise projects with a Chinese investment amount of USD 300 million or more. Local-enterprise projects below that amount would generally be filed with the provincial authority.
The USD 300 million threshold therefore allocates responsibility between filing authorities. It is not a general exemption from filing.
3. Overseas reinvestment reporting would be considerably wider
Under the 2017 measures, an enterprise investing through a controlled offshore entity generally reported only a large non-sensitive project, defined as one with a Chinese investment amount of at least USD 300 million.
The draft removes that monetary threshold. An investor that undertakes a non-sensitive investment through a controlled overseas enterprise or other organisation would have to submit an overseas reinvestment report through the online system at least 20 working days before implementation. The same reporting approach would apply where the controlled offshore entity makes a round-trip investment into China.
This change could affect ordinary group restructurings, follow-on investments, acquisitions by existing offshore subsidiaries and investments funded outside China. A project should not be assumed to fall outside NDRC oversight simply because no new capital is remitted directly from the mainland.
4. Early-stage reporting: projects of USD 100 million or more, and diplomatically sensitive projects
A new early-stage reporting duty would apply to:
- projects with a Chinese investment amount of USD 100 million or more; and
- projects that concern China’s diplomatic relations with another country.
The report would be due at least 10 working days before important preliminary work. The draft identifies activities such as making an investment commitment to a foreign government and signing an investment agreement or similar document.
For affected transactions, regulatory planning may therefore need to begin before signing. Deal teams should build the reporting timetable into heads of terms, exclusivity arrangements, signing conditions and communications with overseas authorities.
5. Completion and termination reporting would have a shorter deadline
For investments within the approval, filing or overseas reinvestment reporting scope, an investor would have to report completion or termination within 10 working days. Completion includes the completion of construction, closing of an equity or asset acquisition, or full disbursement of the Chinese investment amount. Termination includes a decision not to proceed or the cessation of ownership, control, management rights or other relevant interests.
The current measures require a completion report within 20 working days for approved or filed projects. The draft both shortens the deadline and expressly adds termination reporting.
A transaction-closing checklist should therefore include the NDRC post-closing report. Exit, liquidation and abandoned-project procedures should do the same.
6. Annual and adverse-event reporting would become part of routine compliance
The draft would require investors to submit an annual outbound investment information report by 31 March, covering their outbound investments as of the end of the previous year.
It would also require an immediate report where a major adverse event occurs during the life of the investment. Relevant events include serious casualties among dispatched personnel, major loss of overseas assets, harm to China’s diplomatic relations, or foreign demands to provide technology or data, or to transfer or dispose of assets or rights, in circumstances that threaten or harm China’s national interests or security.
These duties will require coordination among finance, legal, tax, human resources, information security and overseas management teams. The parent company needs a reliable way to receive information from each offshore entity quickly enough to meet the reporting standard.
7. “Chinese investment amount” would cover more than cash
The draft defines the Chinese investment amount broadly. It includes money, securities, physical assets, technology, data, intellectual property, equity, debt, financing and guarantees contributed directly by the investor or through controlled overseas entities.
This matters when determining the filing authority, whether the USD 100 million early-stage reporting threshold is reached, and the potential amount-based penalty exposure. Companies should calculate the amount across the full investment chain rather than looking only at the cash remitted from China.
8. Penalties would become more direct and measurable
The draft imports and specifies the liability framework under the State Council regulations. Investing in a prohibited project, failing to obtain required approval or filing, or obtaining approval or filing through improper means could result in orders to stop the investment or dispose of shares or assets, confiscation of illegal gains, and fines calculated as a percentage of the Chinese investment amount. Responsible managers and other directly responsible personnel may face separate fines.
For certain violations, the authorities could also decline applications for up to three years or prohibit outbound investment activity for one to three years. Failure to submit required reports may lead to corrective orders, warnings or public criticism. Professional service providers may be referred to their regulators where they knowingly support a violation or issue materially false or misleading documents.
Outbound investment compliance should therefore be treated as a board-level risk issue, especially for high-value projects and structures involving multiple offshore entities.
What the NDRC draft means for Hong Kong holding and financing structures
Investments by mainland investors into Hong Kong, Macao and Taiwan would continue to be treated by reference to the outbound investment rules. Investments made through controlled entities in those jurisdictions into a third country would also be covered.
Hong Kong remains a practical platform for regional headquarters, treasury, financing, holding and acquisition activities. Groups using Hong Kong entities should map the complete chain from the mainland investor to the immediate offshore vehicle, operating subsidiaries, financing arrangements and ultimate investment. They should also align NDRC compliance with the applicable Ministry of Commerce, foreign exchange, tax, beneficial ownership, data, technology export and destination-country requirements
Outbound investment compliance checklist: practical actions to take now
Companies and individuals do not need to wait for the final measures before improving their readiness. A sensible preparation programme would include the following:
- Build an inventory of overseas interests. Include directly held investments, controlled offshore entities, Hong Kong and other holding platforms, funds, trusts, guarantees, shareholder loans and overseas reinvestments.
- Check the historical compliance record. Compare actual ownership, investment amounts, destinations and business activities with existing approval, filing and reporting documents. Identify missing changes, completion reports or other inconsistencies.
- Revisit projects in the pipeline. Determine whether an investment is sensitive, which authority would handle it, whether the USD 100 million early-stage reporting rule could apply, and whether an offshore subsidiary will be the investing entity.
- Create a compliance calendar. Track pre-implementation approvals and filings, the proposed 20-working-day overseas reinvestment report, the 10-working-day preliminary-work report, completion or termination reports, and the proposed 31 March annual report.
- Improve internal escalation. Overseas subsidiaries should know which casualties, asset losses, government demands, technology or data requests, and forced-disposal scenarios must be reported immediately to the mainland parent.
- Review technology and data flows. Identify technology, software, source code, technical know-how, datasets and personal information that may be transferred through licensing, remote access, staff secondment, training or technical support.
- Retain a clear evidence trail. Keep investment committee papers, source-of-funds records, valuation materials, con
How CW CPA can support outbound investors
Outbound investment now requires more than choosing a jurisdiction and obtaining a pre-departure filing. The investment structure, funding route, tax position, accounting treatment, beneficial ownership, internal controls and ongoing reporting obligations need to work together.
CW CPA can assist businesses and individual investors with:
- pre-investment structuring and feasibility reviews;
- Hong Kong and overseas company establishment and governance;
- tax and financial due diligence for acquisitions;
- cross-border tax planning and transaction support;
- accounting, audit and reporting for offshore groups;
- review of investment flows, ownership structures and supporting records; and
- coordination with legal, banking and other professional advisers where regulatory approvals or specialist opinions are required.
Investors with existing offshore structures should use the consultation period to identify gaps and assemble supporting records. Those planning new projects should place regulatory classification and reporting timelines near the start of the transaction process, before commercial commitments become difficult or costly to change.