Simpler rules for M&A 'positive'

The nation's simplified approval system for outbound direct investment, which has shifted from prior approval toward a registration and filing framework, is a positive step, but corporations need clarification about the new system, a partner at Ernst & Young Global Ltd told China Daily.

"Our clients welcome the move as a positive development to boost outbound investment, but the overall procedures and specific filing requirements need further clarification," said Yew-Poh Mak, who specializes in transaction advisory services in China.

Last year, China made a major leap in its ODI regulatory framework by issuing two documents to simplify the formerly onerous procedures. The documents narrowed the scope of investments that required case-by-case approvals. Projects that require approval by the National Development and Reform Commission, the top economic planner, are now limited to those with an investment of more than $1 billion. Projects involving an investment between $300 million and $1 billion that do not involve "sensitive" sectors or regions only need to be registered with the NDRC. Smaller projects only need to be registered at the provincial level.