Guides
The WFOE Negative List of Restricted Industries
How China’s foreign investment negative list affects WFOEs: restricted and forbidden sectors, annual updates, general and regional measures, and business scope.
The Chinese government has a “negative list” of industries and sectors in which foreign investment is either restricted or completely forbidden. This list applies to WFOE companies, which must ensure their business scope doesn’t fall within a negative-list category.
The government updates the negative list annually. The list includes a general list of restricted industries that applies to all WFOE companies, in addition to a special administrative measures list that applies to WFOEs established in certain regions of China.
Business scopes and activities not on the negative list are generally considered permitted; however, there might still be restrictions based on factors such as registered capital or levels of foreign ownership allowed within a certain industry or sector.
Over the years China has relaxed regulations and removed some sectors from the negative list; it recently removed all restrictions on the manufacturing sector.
The list is very dynamic and always changing, with some sensitive and strategic sectors that are more likely to be restricted or forbidden.
- Protected agriculture and seed production.
- Any involvement in rare earths and strategic minerals or mining.
- Energy projects involving natural resources or national infrastructures.
- Telecommunications or publishing of media of sensitive topics.