NDRC Releases Draft ODI Regulation for Public Comment
2026-09-2324
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The Rule on Outbound Investment (the “Rule”) issued by the State Council has been in effect since July 1, 2026. The Rule aims to regulate outbound investment, for purposes of bolstering high-level opening-up, expanding investment cooperation and better safeguarding national security. To implement the Rule, China’s National Development and Reform Commission (“NDRC”) has released a revised draft of administrative measures for outbound direct investment (the “Draft Measures”) for public comment. The Draft Measures is to update and replace the existing administrative measures for outbound direct investment that NDRC issued in 2017.
1. Broader coverage of outbound direct investment
The Draft Measures expands scope of investors to cover resident individuals and further extends scope of investment targets to cover non-enterprise organizations.
Specifically:
Investors include enterprises, organizations and resident individuals within the territory of China (collectively the “Investors”).
The outbound direct investment refers to those activities whereby the Investors, by way of contributing assets or equity, or providing financing, guarantees, and the like, directly or indirectly obtain ownership, control, operational management rights and other related rights and entitlements in respect of enterprises, assets, and the like in other countries (regions) and those reinvestment activities by the Investors in other countries (regions).
The activities mainly include but are not limited to the following circumstances:
(1) the acquisition of the ownership, use right or other interests in overseas land;
(2) the acquisition of overseas natural‑resource exploration right and development concessions or other interests;
(3) the acquisition of the ownership, operational management right or other interests in overseas infrastructure;
(4) the acquisition of the ownership, operational management right or other interests in overseas enterprises, other organizations or assets;
(5) the new establishment, renovation or expansion of overseas fixed assets;
(6) the incorporation of a new enterprise or organization overseas or the increased investment in an existing overseas enterprise or organization;
(7) the new establishment of an overseas equity investment fund or equity investment in such fund; and
(8) the control over an overseas enterprise, organization or assets by means of agreements, trusts or otherwise.
“enterprises” include all types of non-financial enterprises and financial enterprises in various forms; “organizations” include non-enterprise organizations such as public institutions and social organizations.
2. Streamlined regulatory framework of outbound direct investment
2.1 The Draft Measures sets out a streamlined regulatory framework of ODI based on the contents of investment, resources of assets and equities to be invested, and investment amount of Chinese Investors as follows:
Approval by NDRC: sensitive outbound investment projects to be carried out by Investors either directly or through overseas enterprises controlled thereby. In general, sensitive outbound investment projects include investments in sensitive countries and regions[1], or sensitive industries[2], or with other sensitive elements as specified by NDRC.
Filing with NDRC or provincial reform and development authority: non-sensitive outbound investment projects directly carried out by Investors, namely the non-sensitive outbound investment projects involving the direct investment of assets, equities or the provision of financing or guarantees.
Specifically:
Filing with NDRC if:
Investor is a centrally administered enterprise (or organization) (including a centrally administered financial enterprise or an enterprise directly subordinate to the administration by the State Council or its subordinate organ); or
Investor is a local enterprise (or organization) and the investment amount of Chinese Investors is USD 300 million or above.
Filing with provincial reform and development authority if:
Investor is a local enterprise (or organization) and the investment amount of Chinese Investors is less than USD 300 million; or
Investor is a resident individual.
Reinvestment reporting to NDRC or provincial reform and development authority: non-sensitive outbound investment projects carried out by Investors through their controlled overseas enterprises or organizations; return investments inside China carried out by Investors through their controlled overseas enterprises or organizations. The reinvestment reporting may refer to the procedures of filing with NDRC as outlined above.
2.2 When assessing whether an outbound direct investment of local enterprise requires filing with NDRC or provincial reform and development authority, the investment amount of Chinese Investors is essential. Generally, as indicated in the Draft Measures, the “investment amount of Chinese Investors” refers to the total value of assets and interests, including currency, securities, physical assets, technologies, data, intellectual property rights, equity interests, creditor’s rights, contributed by an Investor directly or through its controlled overseas enterprises and organizations, as well as financing, guarantees and so on provided thereby. Where an Investor’s controlled overseas enterprises or organizations contribute assets or interests, or provide financing, guarantees or so on, such act shall be deemed as contribution of assets or interests or provision of financing, guarantees or other support by the Investor through such controlled overseas enterprises or organizations.
2.3 Investors shall obtain approval or filing notice, as applicable, prior to their contribution of assets, interests or provision of financing or guarantees. As for reinvestment reporting, Investors are required to submit reports 20 working days prior to carrying out such reinvestment.
3. High-level summary of NDRC approval/filing procedures
Phase | Approval | Filing |
Material-correction notification | Within 5 working days upon receipt | Within 5 working days upon receipt |
Seeking comments from other government departments (if deemed necessary by NDRC) | Target 7 working days; no reply will be deemed as consent | Target 7 working days; no reply will be deemed as consent |
Assessment by consultant agency (if deemed necessary by NDRC) |
| May refer to assessment procedure under NDRC approval |
Statutory time limit | 20 working days (including time for seeking comments, excluding time for assessment); permissible extension up to 10 working days | 7 working days (including time for seeking comments, excluding time for assessment); permissible extension up to 7 working days |
Validity period of approval/filing | 2 years | |
Extension application | File application 30 working days prior to expiry | |
Statutory extension decision time limit | Within 20 working days after receipt | Within 7 working days after receipt |
4. Outbound investment security review
Under China’s current ODI mechanism, national security is one of the factors that the relevant governmental authorities need to consider when examining and approving ODI applications. For example, applicants should address in their application reports an analysis of the impact of overseas investment projects on national interest and national security.
The Draft Measures requires security review of outbound investment and transfer or disposal of relevant assets, rights and entitlements that affect or may affect national security interests. Investors and related organizations or individuals are required to provide assistance and cooperation and shall comply with the security review decisions.
5. Additional reporting obligations for Investors
5.1 Reporting before important preliminary work and upon project completion or termination
The Draft Measures further requires Investors to report their investments to NDRC prior to launching and after completion or termination. Specifically:
Investors shall submit a working report to NDRC 10 working days prior to carrying out important preliminary work (such as making investment commitment to foreign government, signing investment agreements or similar documents, other preliminary work that may affect diplomatic relationship between China and the relevant foreign countries), if
(1) the investment amount of Chinese Investors reaches USD 100 million or above; or
(2) the outbound investment relates to diplomatic relations between China and the relevant foreign countries.
Investors shall submit a completion or termination report to NDRC within 10 working days after their outbound investment projects are completed3 or terminated4.
Investors shall submit a written report to respond upon receiving inquiries from NDRC in connection with material issues in their outbound investment.
5.2 Reporting of material adverse circumstances
The Draft Measures expands the scope of material adverse circumstances and requires the Investors to immediately submit a material adverse circumstance report to NDRC if:
(1) major casualties of dispatched personnel, substantial losses of overseas assets, or impairment of China’s diplomatic relations with relevant countries, etc. occur;
(2) foreign parties request the provision of technology, data or the like, which threatens or harms China’s national interests and national security;
(3) foreign parties request the transfer or disposition of assets or interests related to the outbound investment, which threatens or harms China’s national interests and national security.
5.3 Annual reporting
The Draft Measures further requires Investors to submit an annual report to NDRC by March 31 every year.
6. Countermeasures against discriminatory restrictions, arbitrary business disruptions and other practices
If any country (region) or international organization adopts discriminatory prohibitions, restrictions, or other similar measures against China in respect of investment and business operations and the like, NDRC may take corresponding measures to protect the safety and legitimate rights and entitlements of the Investors and their outbound investment.
Moreover, upon request by Investors, NDRC may take one or multiple measures against discriminatory foreign organizations or individuals as follows:
prohibiting or restricting foreign organizations or individuals from engaging in investment within China;
prohibiting or restricting domestic organizations or individuals from conducting transactions or cooperation with them;
other feasible measures that may protect Investors and their legitimate interests in outbound investments.
7. Exceptions to NDRC approval and filing
Where an Investor makes investments in overseas financial markets through Qualified Domestic Institutional Investors (QDII), Hong Kong‑Mainland Stock Connect, Cross‑border Wealth Management Connect or other channels, such investment does not require NDRC approval, filing or reporting, save for any of the following circumstances:
(1) upon completion of such investment, the Investor, acting alone or jointly with its concert parties, obtains control over the invested enterprise;
(2) upon completion of such investment, the aggregate proportion of equity interests or voting rights in the invested enterprise held by the Investor alone or together with its concert parties reaches an integral multiple of 10%;
(3) Other circumstances explicitly specified by NDRC.
8. MHP Observations and Key Takeaways
(1) The Draft Measures formally includes resident individuals into outbound investors and non-enterprise organizations into investment targets. Individuals will have a genuine compliant channel to make cross-border investments with relatively heavy burden of daily regulatory compliance.
(2) Investors may face a tightened reporting window, stricter supervision for national security and need to budget more resources to ensure their compliance with various filing and reporting obligations; failure to submit reporting will lead to administrative penalties.
(3) Requirements for investment in overseas financial markets have been formally cleared to provide guidance and certainty for Investors.
1. The sensitive countries and regions include:
(1) Countries and regions that have not yet established diplomatic relations with China;
(2) Countries and regions where wars and civil strife occur;
(3) Countries and regions where investment shall be restricted according to the international treaties and protocols concluded or acceded by China; and
(4) Other sensitive countries and regions.
2. The sensitive industries include:
(1) Research, production, maintenance and repair of weapons;
(2) Development and utilisation of cross-border water resources;
(3) News media; and
(4) Industries for which outbound investments shall be restricted according to Chinese laws, regulations and related regulatory policies.
The category of sensitive industries will be released by NDRC.
3. It refers to circumstances such as completion of the construction, closing of equity or asset of the investment target, and full spending of investment amount of Chinese Investors.
4. It refers to circumstances that Investors cease to pursue the overseas investment, or no longer hold the overseas ownership, control rights, operational management rights and other relevant interests arising from such overseas investment.
