Allows 100 per cent foreign ownership in certain value-added telecommunication services

08 Apr 2024

On 8 April 2024, the Ministry of Industry and Information Technology (MIIT) issued a Circular on Launching the Pilot Program for Expanding the Opening-up of Value-Added Telecommunications Services (VATS). Previously, foreign investment in VATS, such as electronic data interchange and networked electronic devices data processing, was capped at a 50 per cent shareholding. The new policy allows qualified foreign investors to establish wholly-owned enterprises in select VATS within the pilot areas of Beijing, Shanghai, Hainan, and Shenzhen.

In these designated pilot regions, restrictions on foreign shareholding will be lifted for various VATS sectors, including Internet Data Centers (IDC), Content Delivery Networks (CDN), Internet Service Providers (ISP), online data and transaction processing, and specific types of information services. However, the relaxation does not extend to sectors such as internet news information, online publishing, online audiovisual, and internet cultural businesses.

Foreign-invested telecommunications enterprises will receive "national treatment," meaning they will be regulated under the same laws and regulations as domestic companies. Operators wishing to engage in VATS activities within these pilot regions must secure a pilot program operating permit from the MIIT.