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On 25 September 2020, the Shanghai Municipal People’s Congress adopted the Shanghai Regulations on Foreign Investment, effective from 1 November 2020 (the Shanghai FDI Regulations). The Shanghai FDI Regulations are the first local-level legislation on foreign investment in China aimed at further opening up the local market, stepping up the promotion of investment, making business opportunities more accessible to foreign investors and protecting their legal rights.

Authors: Amy Yin

1. Overview

The Shanghai FDI Regulations comprise six chapters, made up of 51 articles that cover general provisions, expansion and opening-up, the promotion of investment, the protection of investments, investment management and services, and miscellaneous other provisions.

The regulations will apply to all foreign investment projects (existing or potential) located within Shanghai, including the China (Shanghai) Pilot Free Trade Zone and New Lingang Area. Furthermore, the regulations specify the cross-regional initiatives within the Yangtze River Delta Ecological Green Integration Demonstration Zone (which includes Wujiang District in Suzhou City and Jiashan County in Jiaxing City, both adjacent to Qingpu District in the Shanghai Municipality) and therefore foreign investment projects located within Wujiang District and Jiashan County may also qualify for preferential treatment under the regulations.