Seven Ministries Jointly Release 11 Measures to Encourage Foreign-Invested Enterprises to Reinvest in China

A joint announcement issued on Friday by seven government departments—including the National Development and Reform Commission (NDRC), the Ministry of Finance, and the Ministry of Commerce—outlined 11 targeted measures aimed at encouraging foreign-invested enterprises to reinvest within China. The details were posted on the official website of the NDRC.
Local authorities are instructed to establish project portfolios tailored to regional conditions to support foreign enterprise reinvestment. Qualifying projects may be added to lists of major or priority foreign investment initiatives, granting them access to associated support policies.

Among the proposals is the promotion of flexible land-use strategies. These include long-term leasing of industrial land, lease-before-sale arrangements, and the use of flexible-term land transfers, all designed to reduce the upfront cost of domestic reinvestment by foreign enterprises. Implementation will follow current policy guidelines.

The notice also emphasized adherence to existing tax incentive frameworks. Foreign investors are encouraged to reinvest earnings in China, with applicable policy support extended to qualified projects listed under the “Encouraged Industries for Foreign Investment” catalogue. Foreign exchange profits generated and retained legally by foreign-invested entities or overseas investors may be transferred within the country under applicable regulatory procedures.

In addition, the notice said that domestic reinvestment projects that involve shareholder loans from foreign affiliates or Panda bond issuance will benefit from streamlined approval processes through “green channel” protocols. Financial institutions are encouraged to offer compliant and risk-controlled products and services to support such reinvestment activities.

Recent figures from the Ministry of Commerce show that between January and May 2025, China registered 24,018 newly established foreign-invested enterprises—an increase of 10.4% compared to the same period last year. During that period, the actual use of foreign capital totaled RMB 358.19 billion, reflecting a year-on-year decline of 13.2%.

Sector-specific data from the same time frame revealed that the manufacturing industry absorbed RMB 91.52 billion in foreign capital, while RMB 259.64 billion went to the services sector. High-tech industries attracted RMB 109.04 billion, with significant year-on-year growth in e-commerce services (146%), aerospace and equipment manufacturing (74.9%), chemical pharmaceuticals (59.2%), and medical instruments and devices (20%).

Jiemian News highlighted that supportive policies for domestic reinvestment have become more frequent since the beginning of the year. On February 19, the General Office of the State Council distributed the “2025 Action Plan for Stabilizing Foreign Investment,” prepared by the Ministry of Commerce and the NDRC. The plan cmprises 20 specific tasks under four focus areas, including measures to promote reinvestment of profits generated by foreign enterprises operating in China.

On June 18, the State Administration of Foreign Exchange released a draft document titled “Notice on Matters Concerning the Deepening of Foreign Exchange Management Reform in Cross-Border Investment and Financing,” which featured nine individual policy items. One key proposal was to remove the registration requirement for foreign-invested entities reinvesting domestically.
Then on June 30, the Ministry of Finance, the State Taxation Administration, and the Ministry of Commerce jointly issued a statement regarding the “Tax Credit Policy for Foreign Investors Using Distributed Profits for Direct Investment.” The announcement confirmed that from January 1, 2025 through December 31, 2028, eligible foreign investors using distributed profits from Chinese resident enterprises for direct investment may access tax credit incentives.