For many Australians (even those working in Financial Services sector with an Australian Financial Services Licence) may or may not fully understand the China’s ODI framework and its approval process.
For example, if Australian entrepreneurs or SME wants to invest overseas or set up their factories or subsidiaries in other countries, they don’t need to get approval from State or Federal government for their overseas direct investment.
On the other hand, China’s Overseas Direct Investment (ODI) approval process is a regulatory framework designed to ensure that Chinese companies’ overseas investments (and/or M&A) align with the country’s broader economic, diplomatic, and strategic goals. This process is particularly important as China continues to grow its global investment footprint. The approval system also serves as a safeguard to manage risks and prevent reckless capital outflows that could negatively impact China’s financial stability.
In a simple context, within Chinese government’s ODI framework, there is a Simplified vs. Full Approval Process:
– Small-scale investments (typically less than USD 10 million) or non-sensitive investments often go through a simplified process, which may only require filing with local NDRC (Development and Reform Commissions) and MOFCOM (Ministry of Commerce) instead of full approval.
– Large-scale investments (over USD 300 million) or investments in sensitive sectors (such as national security, finance, and technology) undergo a more rigorous review, requiring full approval from both national NDRC and MOFCOM and potentially additional regulatory scrutiny.
How does the China’s ODI relates to Australian entrepreneurs or project owners?
Chinese companies seeking to expand their global presence may invest in or partner with Australian project owners in various sectors such as infrastructure, real estate, energy, mining, agriculture, technology, and education. These investments typically fall under China’s ODI strategy.
For instance, if a Chinese company invests in an Australian project (such as a vineyard, a property project, a mine, a Joint-Venture with a Startup/Financial Services Institution, a new port, etc. ), the Australian project owner is the direct recipient of the funds, technical collaboration, or management expertise from the Chinese investor(s).
😆 😆 If you are interested to learn more about ODI, its approval process, its costs and how long an ODI case approved, please write email to:
Joseph Tse
Vice President (Venture Incubator & Business Growth)
副总裁 (风险投资孵化器与业务增长)
Email: [email protected]
