The Chinese mainland has introduced a new action plan aimed at stabilizing foreign investment, expanding market access and improving the operating environment for foreign-invested enterprises.
The Action Plan for Stabilizing Foreign Investment and Improving Investment Quality (the “Action Plan”) was issued by the Ministry of Commerce, the National Development and Reform Commission and the Ministry of Finance with State Council approval. The notice is dated 16 June 2026 and was published on 24 June 2026 as Shang Zi Fa [2026] No. 97. It sets out 15 measures covering market access, foreign investment facilitation, investment promotion, business support and regulatory administration.
The Action Plan confirms the direction of national policy, but many measures still require detailed rules, expanded pilot programmes or local implementation. Foreign investors should therefore distinguish between measures that are already available and policy proposals that cannot yet be used in a specific transaction.
Wider access to selected service and healthcare sectors
The Action Plan proposes further opening in several service sectors.
Foreign participation may be expanded through pilot programmes covering vocational training institutions, vocational colleges and selected universities specializing in science, engineering, agriculture and medicine. Beijing is expected to continue testing opening measures in modern service sectors, including the digital economy and healthcare, through the National Comprehensive Demonstration Zone for Expanding the Opening-up of the Services Sector.
The authorities also intend to upgrade the Mainland and Hong Kong Closer Economic Partnership Arrangement and the corresponding arrangement with Macao, with further services-sector opening for qualifying Hong Kong and Macao investors.
Healthcare is another priority. The Action Plan calls for:
- detailed rules on segmented pharmaceutical manufacturing, including cross-border arrangements involving overseas marketing authorization holders;
- consideration of additional pilot locations for foreign investment in biotechnology and wholly foreign-owned hospitals;
- wider commercial insurance coverage for innovative pharmaceuticals and medical devices; and
- better access to retail distribution channels for pharmaceutical products manufactured by foreign-invested enterprises.
These measures indicate where further opportunities may emerge, but investors must continue to assess the applicable foreign investment negative list, industry licences and pilot-area rules before proceeding.
Greater operating flexibility for financial institutions
The Action Plan proposes several measures for foreign-invested financial institutions and large foreign-invested enterprises.
Foreign institutions may receive wider access to risk-management instruments, including government bond futures, subject to regulatory and risk-control requirements. The authorities also support foreign institutions conducting fund investment advisory business in accordance with applicable rules.
For selected foreign-invested enterprises, the plan contemplates more convenient cross-border financing quotas and improved international settlement services from domestic banks. It also supports eligible key foreign-invested enterprises seeking a domestic listing and calls for better pre-filing communication with stock exchanges.
Access to these measures will depend on eligibility criteria, financial-sector regulation and the implementation practices of banks, exchanges and other competent authorities.
Changes to foreign-investor mergers and acquisitions
The Chinese mainland intends to revise its rules governing acquisitions of domestic enterprises by foreign investors. The stated objectives include improving approval and administration procedures, adjusting requirements for payment of acquisition consideration and strengthening coordination among regulators.
The Action Plan also proposes allowing qualifying foreign equity investment institutions to participate as strategic investors in securities issuances by listed companies operating in unrelated industries.
These proposals may create more options for inbound acquisitions and equity investment. However, foreign investors should not assume that current transaction requirements have already changed. A proposed acquisition may still require analysis under the foreign investment negative list, merger control rules, national security review requirements, foreign-exchange administration, tax rules and sector-specific regulation.
Transaction structures should therefore be reviewed against the rules in force at the time of signing and closing.
More detailed rules for cross-border data transfers
The Action Plan supports the development of scenario-based and field-level negative lists for outbound data transfers in free trade zones and cities participating in services-sector opening pilots.
It also calls for national standards to help identify important data in sectors including:
- industry;
- telecommunications;
- geographic information;
- automotive;
- pharmaceuticals;
- seed production;
- aerospace; and
- civil aviation.
More detailed standards could help foreign-invested enterprises determine which data is subject to stricter controls. This is particularly relevant to multinational companies that share operational, customer, employee, research or product data with overseas headquarters and regional platforms.
Until the relevant lists and standards are issued, companies should continue to classify their data and assess outbound transfers under the existing cybersecurity, data security and personal information protection framework. The Action Plan does not itself remove current data-transfer obligations.
Support for reinvestment of Chinese mainland profits
Promoting domestic reinvestment by foreign investors is a central part of the Action Plan. The authorities intend to implement the existing tax credit for qualifying direct investment made with profits distributed by Chinese mainland resident enterprises. More reinvestment projects may also be included in national or local lists of major and key foreign-invested projects.
The tax policy already in effect applies to qualifying reinvestments made from 1 January 2025 to 31 December 2028. Subject to the statutory conditions, an overseas investor may receive a tax credit calculated at 10% of the qualifying investment amount, or at the applicable treaty rate where that rate is below 10%.
Qualifying forms of investment may include:
- increasing the paid-in capital or capital reserve of a Chinese mainland resident enterprise;
- establishing a new Chinese mainland resident enterprise; or
- acquiring equity in a Chinese mainland resident enterprise from an unrelated party.
The policy is subject to several conditions. Among other matters, the invested enterprise must operate in an industry included in the Catalogue of Encouraged Industries for Foreign Investment, the investment generally must be held for at least five years, and the funds or assets must be transferred through the prescribed route. Reporting and supporting-document requirements also apply.
Foreign investors considering dividend distribution and reinvestment should plan the transaction before funds are moved. An incorrect payment route, an ineligible investment activity or insufficient supporting documentation may prevent the investor from obtaining the intended tax treatment.
Greater support for foreign-invested research and development
The Action Plan encourages multinational groups to establish research and development centres in the Chinese mainland. Proposed support includes:
- improved policies for foreign-invested R&D centres;
- measures to attract foreign high-level talent;
- support for open innovation platforms and training bases;
- assistance with commercializing research results; and
- import tax incentives for qualifying scientific research equipment and supplies.
The commercial benefit will depend on the location and function of the R&D centre. Companies should compare local incentive policies, talent availability, intellectual property arrangements, data-transfer requirements, customs procedures and the conditions for obtaining R&D-related tax treatment.
Equal access to government support and procurement
The Action Plan reiterates that foreign-invested enterprises should receive national treatment unless laws and regulations provide otherwise or national security is involved.
It specifically calls for equal treatment in:
- business support policies;
- government procurement;
- public tendering;
- procurement by universities and research institutions; and
- consumer-support programmes, including green consumption initiatives.
The plan also requires fair competition reviews of relevant rules and policy measures. A qualifying product or service should not be excluded from a consumer-support programme merely because it carries a foreign brand or is supplied by a foreign-invested enterprise.
For foreign-invested enterprises, this creates a clearer basis for reviewing tender conditions and local support policies. Companies that encounter differential treatment should retain the tender documents, eligibility criteria, correspondence and other evidence needed to raise the matter through the appropriate administrative channel.
More disciplined local investment promotion
The Action Plan calls for national guidance on what local governments may encourage or must avoid when attracting investment. Provincial governments may provide support to qualifying projects within the permitted framework, while government authorities are expected to honour policy commitments made in accordance with law.
This is relevant to investors negotiating grants, rental support, tax-related subsidies, talent incentives or other local investment packages. Any incentive should be documented in a formal agreement that identifies:
- the granting authority;
- the legal and policy basis;
- eligibility conditions;
- performance targets;
- payment timing;
- reporting obligations;
- clawback provisions; and
- the consequences of changes to the project.
A general statement made during investment discussions should not be treated as equivalent to an enforceable government commitment.
More connected foreign investment reporting
The authorities intend to improve the foreign investment information reporting system, establish more direct reporting channels and strengthen information sharing among government departments.
Reported information may be used to support foreign-exchange registration, administrative licensing, fixed-asset investment administration and other regulatory functions. Foreign-invested enterprises should expect increasing consistency checks across government systems.
This makes data governance part of routine corporate compliance. A company’s registered capital, shareholders, investment amount, business activities and project information should be consistent across its corporate registration, foreign investment reports, tax records, foreign-exchange registration, licences and financial records.
Priorities for foreign investors
The Action Plan provides a useful indication of the sectors and procedures that may receive further policy support. Its immediate relevance will vary by industry, investment structure and location.
Foreign investors should consider five actions:
- Review planned investments against the announced priorities. Projects involving services, healthcare, financial services, R&D, encouraged industries or domestic reinvestment may benefit from future implementing measures.
- Monitor the rules that will give effect to the Action Plan. Particular attention should be paid to revised M&A rules, expanded healthcare pilots, industry data catalogues and local investment-support policies.
- Assess reinvestment before distributing profits. The tax credit has detailed conditions relating to the investor, investment form, business activity, holding period, payment route and reporting documents.
- Check eligibility for national and local support. Foreign-invested enterprises should review procurement opportunities, consumer-support programmes, R&D incentives and major-project service mechanisms on the same basis as eligible domestic enterprises.
- Reconcile regulatory information across systems. Corporate, tax, foreign-exchange, licensing and investment information should be reviewed for accuracy and consistency as government information sharing develops.