On June 1, 2026, Xinhua News Agency was authorized to release State Council Order No. 837—the “State Council Regulations on Foreign Investment.” This administrative regulation will take effect on Effective July 1...only 15 days left.

How important is it? To sum it up in one sentence:This is the first administrative regulation specifically aimed at the ”going global” strategy in the more than 40 years since China opened up to the outside world.

In the past, foreign investment was governed by the *Foreign Investment Law* as the overarching legislation, and there has always been a legal basis for ”bringing in” foreign investment. However, the ”going global” sector had long been regulated only at the regulatory level, and in practice, ODI (outward direct investment) filing had become a gray area where many companies followed a ”get on board first, buy the ticket later” approach. Decree No. 837 has completely transformed this situation.

If your cross-border business is operated through a Hong Kong company, we recommend that you read this article carefully.

I. What Exactly Does Order No. 837 Regulate?

Decree No. 837 pertains to China’s outbound investment sectorHighest level, strictest regulationAdministrative regulations. Key changes:

Simply put: Order No. 837 elevated ODI from being ”managed separately by the National Development and Reform Commission and the Ministry of Commerce” to ”unified management at the State Council level,” and transformed compliance requirements from ”soft constraints” into ”hard rules.”

II. How Significant Is the Impact on Cross-Border Sellers? Let’s Look at Three Typical Scenarios

Scenario 1: A Hong Kong company receives payment but does not have ODI filing

Many cross-border sellers receive payments through Hong Kong companies, keep their profits in Hong Kong accounts, and have never filed for ODI registration.

Following the implementation of Order No. 837, this structure will be deemed to beFailure to obtain approval or file a report for foreign investment in accordance with the law. In minor cases, they will be required to rectify the situation within a specified time frame; in more serious cases, they may face administrative penalties or even criminal liability.

The key point is: You can't apply for a replacement ODI at any time. If a company was established a long time ago, has accumulated funds, and lacks a clear investment strategy, it will be very difficult to obtain retroactive approval.

Scenario 2: Insufficient Substantive Operations of a Hong Kong Company

The reality for a large number of Hong Kong companies is that they have a registered address provided by a third party, no employees, no office space, and exist solely as bank accounts and payment collection platforms.

Decree No. 837 explicitly requires that enterprises engaged in foreign investment must possessSubstantive Business Capability. ”Shell companies” with no substantive business operations will be subject to look-through reviews and rectification requirements.

Scenario 3: Investing Back into the Mainland Through a Hong Kong Company

Some sellers use Hong Kong companies to hold stakes in mainland Chinese companies (through "round-trip investment" or "fake foreign investment" structures) in order to obtain tax benefits or circumvent foreign exchange controls.

Decree No. 837 clarifies that return investments also fall under the scope of foreign investment regulation. Without valid ODI procedures, such structures are also in violation of the regulations.

III. 15-Day Window: Check These 4 Points Yourself

With only 15 days left until July 1, we recommend that cross-border sellers check the following items one by one:

[ ] Does your Hong Kong company have a valid ODI filing? If not, determine whether it can be reissued, along with the reissuance process and time requirements.

[ ] Does the Hong Kong company engage in substantive business operations? Can you provide evidence of actual business operations, such as employee records, proof of business premises, and business contracts?

[ ] Is the profit repatriation process compliant? When a Hong Kong company repatriates profits to an affiliated company in mainland China, is there a legitimate business substance to support this?

[ ] Is there a return on investment in the architecture? If a Hong Kong company holds a controlling stake in a mainland company, are the ODI procedures complete?

If any of these apply to you, we recommend that you begin compliance remediation as soon as possible before July 1.

Want to know if your Hong Kong company’s structure poses any compliance risks under Order No. 837? Scan the QR code to contact us.

Cell phone: 18676749275 ｜ WeChat: qcygscszk

IV. The Path to Compliance: It’s Not Just About ODI Filing

Many sellers believe that ”obtaining ODI registration is enough to ensure compliance.” However, compliance under Order No. 837 is not a single step, but rather a comprehensive system:

Step 1: ODI Filing/Approval

Apply to the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) for filing of overseas investment to obtain the “Enterprise Overseas Investment Certificate.” Key supporting documents include: the investor’s qualifications, proof of compliance for the overseas company, a feasibility study report, and a statement of funding sources.

Step 2: Foreign Exchange Registration

After completing ODI filing, go to the State Administration of Foreign Exchange to register the foreign exchange for overseas direct investment, thereby establishing a legal channel for the outflow of funds.

Step 3: Establishing Substantive Operations for a Hong Kong Company

Ensure that the Hong Kong company has a physical office, employees (who may serve as part-time secretaries), business transaction records, and records of annual filings and tax returns.

Step 4: Ensuring Compliance with Profit Repatriation Channels

Repatriate the profits of Hong Kong companies to the mainland through legitimate channels such as dividends, service fees, and trade rebates.

Given the highly specialized nature of the entire process, the stringent requirements for documentation, and the tight timeline, it is recommended that a professional organization assist with the process.

V. Qi Cai Ying: Experts in ODI Compliance and Hong Kong Corporate Structures

Qicaiying Group has specialized in cross-border financial and tax compliance and Hong Kong corporate services for over 10 years, offering:

✅ Full-Service ODI Filing Assistance: Simultaneous processing across three channels—the National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange—with a one-stop service covering document preparation, application submission, and approval

✅ Establishing a Compliance Framework for Hong Kong Companies: Designing a compliant framework for the entire process—from registration to actual operations to ODI filing

✅ Compliance Assessment for Existing Hong Kong Companies: Assess the compliance risks of the existing architecture under Order No. 837 and develop a remediation plan

✅ Compliance Rectification for Return Investments: Assisting with the compliance-based restructuring of sham foreign investment structures

✅ Planning Profit Repatriation Routes: Designing multiple compliance pathways, including dividend distributions, trade in services, and the repatriation of procurement

With July 1 fast approaching, the window of opportunity is rapidly closing.

Want to know if your Hong Kong company’s structure poses any compliance risks under Order No. 837? Scan the QR code to contact us.

Cell phone: 18676749275 ｜ WeChat: qcygscszk

Note: ”ODI Diagnosis”—Qicaiying Consultants will provide you withCompliance Assessment of Hong Kong Company Structures, including: whether the current architecture meets the requirements of Order No. 837, what additional procedures are needed, the optimal remediation path, and the timeline.