Unified Regulations on Outbound Investment Come into Effect
On 1 July 2026, the Regulations on Outbound Investment (国务院关于对外投资的规定) (State Council Order No. 837, or “Order 837“) issued by the State Council of the People’s Republic of China (“PRC“) on 5 May 2026, came into effect. As China’s first State Council level regulation, Order 837 consolidates previously fragmented rules issued by the PRC National Development and Reform Commission (“NDRC“), PRC Ministry of Commerce (“MOFCOM“), and PRC State Administration for Foreign Exchange (“SAFE“) governing outbound investment activities into a unified legal framework, marking a new phase of systematic regulation of China’s outbound investment. Below are the highlights of Order 837.
- Individual residents formally included: Individual residents are formally brought within the unified regulatory framework for outbound investment. Previously, individual residents relied on the SAFE Circular on Issues Concerning Foreign Exchange Administration of Overseas Investment and Financing and Round-trip Investment by Domestic Residents through Special Purpose Vehicles (国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知, “Circular 37“) to complete foreign exchange registration for the round-trip investment structures. Standalone individual overseas investment and non-round-trip cross-border investment have long lacked explicit legislation and regulatory support. Order 837 now includes individuals in the definition of “investor,” thereby achieving full coverage of all outbound investment entities. However, before the implementation rules of Order 837 are issued, the compliant channels available to individuals for overseas direct investment remain limited to Circular 37 and other relevant provisions.
- Expanded export control scope: In addition to the “products and technology” already subject to export control review by MOFCOM under the outbound direct investment (ODI) process, Order 837 expressly brings services, data and other asset categories within its regulatory scope, as well as other non-traditional export methods (including cross-border personnel dispatch and technical guidance).
- National security review for outbound investment: For the first time at the State Council level, Order 837 establishes the principle of an independent national security review mechanism for outbound investments. It covers both initial investments and subsequent transfers or disposals of overseas assets. It also expands the reviewing authorities beyond NDRC alone to include MOFCOM and other relevant departments of the State Council.
- Enhanced penalties and personal liability: Order 837 expressly includes the personal liability on directly responsible individuals of companies for violations of Order 837. It also introduces tiered penalties calculated by reference to investment amounts.
Although some of the key changes are still awaiting further implementation regulations to be established, companies and individuals in outbound investment are still encouraged to reassess existing transaction structures for compliance gaps. Overseas counterparties may wish to factor the heightened Chinese regulatory requirements into deal timelines and contractual risk allocation. We will also issue a detailed Legal Update on Order 837 to share more analysis.
China Issues Provisional Regulations on the Protection of Basic Rights and Interests of Workers Beyond Retirement Age
On 10 May 2026, the People’s Republic of China (“PRC“) Ministry of Human Resources and Social Security, together with the PRC National Health Commission, the PRC Ministry of Emergency Management, the PRC State Taxation Administration, and the PRC National Healthcare Security Administration, jointly promulgated the Provisional Regulations on the Protection of Basic Rights and Interests of Workers beyond Retirement Age (超龄劳动者基本权益保障暂行规定, “Regulations“). The Regulations took effect on 1 July 2026 and represent China’s first dedicated regulation clarifying the rights of workers who continue working beyond the statutory retirement age (“Workers beyond Retirement Age“). They were issued to plug a gap left by the PRC Employment Contract Law, under which Workers beyond Retirement Age had generally been treated as parties to a civil “labour service relationship” rather than an employment relationship, leaving remuneration, rest, and work-injury protections without a clear legal basis.
Key highlights of the Regulations are as follows:
- Scope: The Regulations apply to employers in the Chinese Mainland that engage Workers beyond Retirement Age under their employment management to perform paid work, including workers re-engaged after early retirement, but exclude workers on flexible delayed retirement, who remain governed by the Employment Contract Law.
- Written employment agreement: Employers must enter into a written employment agreement covering the term, duties, location, working hours, rest, remuneration, social insurance, labour protection, and occupational hazard prevention.
- Pay and working hours: Remuneration must not fall below the local minimum wage and must be paid monthly in cash. Overtime is generally discouraged and, where arranged, must comply with the Employment Law.
- Work-injury coverage: A particularly notable innovation, Article 15 of the Regulations provides that employers shall enrol Workers beyond Retirement Age in work-injury insurance and pay the corresponding premiums, with no contribution required from the individuals. It also provides that Workers beyond Retirement Age who sustain work-related accidents or occupational diseases shall undergo work-injury determination and labour capacity assessment in accordance with the relevant regulations, and shall be entitled to the corresponding work-injury benefits. This provision closes a long-standing gap under which Workers beyond Retirement Age, previously treated as parties to a civil labour-service relationship rather than an employment relationship, were routinely denied work-injury benefits because employers had no basis to enrol them in the statutory work-injury insurance scheme.
- Dispute resolution: The Regulations provide that disputes between employers and Workers beyond Retirement Age regarding wages, rest and leave, occupational safety and health, or work-related injury protection shall be resolved in accordance with the Law of the People’s Republic of China on the Mediation and Arbitration of Employment Disputes. This means that Workers beyond Retirement Age have a right of recourse similar to normal employees if the disputes are related to wages, rest and leave, occupational safety and health, or work-related injury protection.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
