Updates on
Encouraged Foreign Investment for Sport-related Businesses in China
By Manuel Torres & Liting Zheng, Garrigues China
On June 30th, 2019, the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce (“MOFCOM”) of the People’s Republic of China (“PRC” or “China”) released the Catalogue of Encouraged Foreign Investment Industries (2019 Edition) (in Chinese: 鼓励外商投资产业目录(2019年版), “2019 Encouraged Catalogue”), which came into force on July 30th, 2019, repealing simultaneously the present Encouraged Industries under the Foreign Investment Industries Catalogue (2017 Edition) and the Catalogue of Priority Industries for Foreign Investment in the Central-Western Region (2017 Edition) (“2017 Regional Catalogue”). Foreign investors invest in industries under the 2019 Encouraged Catalogue are entitled to enjoy preferential policies according to relevant laws and regulations.
Among others, issues related to encouraged foreign investment for sport-related businesses in China could be found as following:
2019年6月30日，国家发展改革委、商务部发布《鼓励外商投资产业目录(2019年版)》，自2019年7月30日起施行。《鼓励外商投资产业目录(2019年版)》包括全国鼓励外商投资产业目录和中西部地区外商投资优势产业目录。其中全国目录415条，与2017年版相比增加67条、修改45条；中西部目录693条，与2017年版相比增加54条、修改165条。
其中，与鼓励在中国开展体育相关业务的外国投资有关的更新如下：
1. Encouraged Foreign Investment Industries for sport-related businesses in China
鼓励外商投资产业在中国开展体育相关业务
The 2019 Encouraged Catalogue contains two parts as (i) Catalogue of Encouraged Foreign Investment Industries at National Level (“National Encouraged Catalogue”); and (ii) Catalogue of Priority Industries for Foreign Investment in the Central-Western Region (“Central-Western Encouraged Catalogue”), under which sport-related businesses are mentioned in:
The 13th Category of the National Encouraged Catalogue, Culture, Sports and Entertainments Industries:
No. 413 Operation of performance sites; and
No. 414 Operation of sports venues, fitness, contest performance and sports training, and intermediate services;
Central-Western Encouraged Catalogue
Per our check, for the National Encouraged Catalogue, these sport-related businesses have been listed as encouraged industries since the Foreign Investment Industries Catalogue (2007 Edition) (currently expired due to revision), when Operation of performance sites was subject to requirements on control (including relative control) by Chinese shareholders (such requirement was removed in the Foreign Investment Industries Catalogue (2015 Edition) (currently expired due to revision)).
Therefore, at the national level, foreign investors participating in these sport-related businesses in China have been entitled to enjoy preferential policies since 2007 and remain to enjoy these preferential policies with the effectiveness of the 2019 Encouraged Catalogue.
At the regional level, it is noticed that under the Central-Western Encouraged Catalogue, several provinces have newly added sport-related businesses as encouraged industries (detailed information in the table above), among which “operation of sports competitions” has been clearly indicated, while a similar description was used by Inner Mongolia Autonomous Region and Qinghai Province in the 2017 Regional Catalogue as “operation of sports industries”.
Thus, it seems that upon the effectiveness of the 2019 Encouraged Catalogue, with the extension of encouraged provinces and autonomous regions for sport-related businesses, the scope of encouraged sport-related businesses within such area has been relatively limited. But as there is no concrete description provided for “operation of sports competitions” and “operation of sports industries”, it is recommended to keep an eye on the implementation of the 2019 Encouraged Catalogue in these provinces and autonomous regions.
2019年版鼓励目录是新时期我国外商投资促进工作的重要依据。从内容上看，它包括两个子目录：一是全国鼓励外商投资产业目录（以下简称“全国目录”），适用于全国，是外商投资产业促进政策；二是中西部地区外商投资优势产业目录（以下简称“中西部目录”），主要适用于中西部地区、东北地区，是外商投资区域促进政策。
全国目录第十三类是文化、体育和娱乐业，包括：演出场所经营；体育场馆经营、健身、竞赛表演及体育培训和中介服务；旅游基础设施建设及旅游信息服务。在中西部地区外商投资优势产业目录中，体育相关产业也多次被提及。
参与这些体育相关业务的外国投资者自2007年起享有享受优惠政策的权利，并依照2019年鼓励目录的有效性继续享受这些优惠政策。
在区域层面，在中西部鼓励目录下，几个省新增了体育相关业务作为鼓励产业（上表中的详细信息），似乎在2019年鼓励目录的有效性下，随着鼓励的省和自治区对体育相关业务的扩展，该地区鼓励的体育相关业务的范围相对有限。但由于“体育竞赛运作”和“体育产业运作”没有具体描述，建议关注这些省区自治区2019年鼓励目录的实施情况。
2. Preferential Policies for Encouraged Foreign Investment Industries
2019版鼓励目录优惠政策
Currently, main preferential policies for encouraged foreign investment industries in China could be listed as following:
1. Exemptions for Tariffs
For foreign invested enterprises in encouraged industries, imported equipment for self-use and the technologies, auxiliary components and spare parts imported along with such equipment within its total investment shall be exempted from import tariff in accordance with relevant laws and regulations.
2. Reduced Tax Rate for Enterprise Income Tax
For qualified foreign invested enterprises in encouraged industries in western regions, the enterprise income tax may be levied at a reduced tax rate of 15%. “Encouraged industries in western regions” refer to those listed in the Catalogue of Encouraged Industries in the Western Region released by NDRC in 2014.
3. Land
Land shall be supplied on a priority basis to encouraged foreign investment industrial projects with intensive use of land. The base price for transferring such land could be determined as no less than 70% of the minimum price standard for the transfer of national industrial land to which the local land grade corresponds.
2017版鼓励目录优惠政策继续适用于2019版鼓励目录，主要优惠政策包括：
1、对于鼓励类外商投资项目，在投资总额内进口自用设备实行免征关税政策；
2、对于符合条件的西部地区鼓励类产业的外商投资企业，减按15%征收企业所得税；
3、对于集约用地的鼓励类外商投资工业项目优先供应土地，在确定土地出让底价时可按不低于所在地土地等别相对应全国工业用地出让最低价标准的70%执行。
Except above, please note that local governments are also entitled to formulate and issue preferential policies on business and investment attraction within the scope of their statutory authority. Therefore, subject to the actual location of the foreign investment project, further preferential policies might be enjoyed by the corresponding foreign investor.
