Нийтлэгдсэн · Mongolian

China's New Policy on 'New Quality Productive Forces': What Foreign Founders Need to Know for Company Registration

A government policy on developing new quality productive forces outlines support for technology innovation, industrial upgrading, and foreign participation. Here's what it means for foreign founders registering a company in China.

Foreign founders looking to register a company in China should pay attention to the latest policy direction on 'new quality productive forces' (新质生产力). The policy, issued by the Central Committee of the Communist Party of China and the State Council, sets out a broad framework for innovation-driven development. While it does not directly change company registration procedures, it signals where government support and regulatory focus will be. Below we break down the practical implications for foreign founders.

What the policy means for your China company registration

The policy emphasizes creating a favorable environment for technological innovation and industrial upgrading. For foreign founders, this suggests that businesses in high-tech sectors may find a more supportive ecosystem, including easier access to research platforms, talent, and financing. However, the registration process itself remains governed by existing laws and regulations. The policy does not introduce new registration steps or documents. Instead, it reinforces the importance of aligning your business scope with encouraged industries such as advanced manufacturing, green technologies, and digital economy.

Encouraged industries and business scope

The policy lists strategic emerging industries that will receive priority: next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. It also highlights future industries like quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. If your company operates in these areas, you may benefit from local incentives and streamlined approvals. When registering, ensure your business scope accurately reflects these activities, as some may require special licenses or filings.

Foreign investment and global talent

The policy explicitly encourages foreign venture capital institutions and international standard organizations to develop in China. It also calls for building a globally oriented innovation cooperation network, including science parks and joint laboratories under the Belt and Road Initiative. For foreign founders, this indicates openness to foreign participation in innovation. However, specific market access rules, such as the Negative List for foreign investment, still apply. The policy also mentions optimizing policies for long-term capital and patient capital, which could ease financing for startups.

Data compliance and cross-border data flows

For tech companies, data is a critical asset. The policy aims to establish a efficient, convenient, and secure mechanism for cross-border data flow. It also calls for improving data property rights, trading, and protection systems. Foreign founders should note that while the policy supports data flows, China's data security and personal information protection laws remain in force. Compliance with these laws is essential when handling data in your China entity.

Intellectual property and technology transfer

The policy strengthens intellectual property protection, including punitive damages for infringement. It also encourages the licensing of scientific and technological achievements to small and medium-sized enterprises on a 'use first, pay later' basis. For foreign founders bringing technology to China, this suggests a more robust IP environment, but it is still crucial to secure your IP through registrations and contracts. The policy also supports enterprises in leading national science and technology tasks, which may open doors for foreign-invested enterprises to participate in government projects.

Talent and work permits

While the policy does not directly address work permits, it emphasizes cultivating talent needed for new quality productive forces. It encourages universities and enterprises to jointly train talent and supports high-skilled professionals. For foreign founders, this means that hiring local talent in these fields may become easier, and there may be more flexibility in recognizing foreign qualifications. However, work permit procedures for foreigners remain unchanged.

Green development and energy

The policy promotes green manufacturing, zero-carbon factories, and a green energy system. It also mentions improving green finance and carbon markets. If your company is in the green sector, you may find incentives such as tax benefits or subsidies. However, environmental regulations and compliance requirements are still mandatory. When registering, consider whether your activities require environmental impact assessments.

Financial support and capital

The policy encourages angel investment, venture capital, and private equity, and supports banks in developing loan products for new quality productive forces. It also mentions expanding bond financing for tech companies and supporting listings. For foreign founders, this could mean better access to funding, but capital contribution rules for registered capital remain the same. Ensure your registered capital meets industry requirements and that foreign exchange procedures are followed.

Compliance and regulatory trends

The policy calls for improved market supervision, including the use of data-driven regulation and reduced on-site inspections. It also mentions research on tax systems suitable for new business forms. For foreign founders, this suggests a more predictable regulatory environment, but also a focus on compliance in areas like AI governance and antitrust. Stay informed about sector-specific regulations.

Key takeaways for foreign founders

• Align with encouraged sectors: Choose a business scope in strategic emerging or future industries to potentially benefit from local support.
• Foreign investment rules still apply: Check the Negative List and ensure your entity structure complies.
• Data compliance is critical: Implement data security measures and understand cross-border data transfer rules.
• IP protection is emphasized: Register trademarks and patents early, and use contracts to safeguard technology.
• Financing options may expand: Explore venture capital and government-guided funds, but ensure capital contributions are properly documented.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.