MOFCOM’s New Sci-Tech Rules: 5 Ways Foreign Investors Can Benefit
China’s Ministry of Commerce (MOFCOM, 商务部) released a new policy package on June 23 supporting foreign investment in science and technology firms. The measures relax equity restrictions, streamline approval for R&D centers, and create new pathways for foreign venture capital. Here is what changed and how to act.
Why It Matters
Foreign investment in China’s tech sector has been under pressure since 2020, with tightening cybersecurity reviews, the 2021 data rules, and the 2023 outbound investment screening regime all creating friction. Foreign direct investment into China’s technology sector fell 14.2% year-on-year in 2025, according to MOFCOM data — though it rebounded 3.8% in Q1 2026.
The new measures are MOFCOM’s most significant attempt to reverse that trend. They target three pain points foreign tech investors consistently cite: ownership caps on R&D subsidiaries, slow approval for technology import contracts, and limited access for foreign venture capital into Chinese tech startups.
The broader context matters. China’s 2026 Legislative Agenda, released in March, includes revisions to the Foreign Investment Law that would codify some of these changes at the statutory level — meaning today’s MOFCOM measures are both actionable now and a signal of what’s coming. The National People’s Congress is expected to vote on the revisions during its October 2026 session.
Industry reception has been cautiously positive. The American Chamber of Commerce in China (AmCham China) noted in a June 24 member briefing that the measures address “three of the top five barriers” its members identified in the 2025 China Business Climate Survey, where 62% of technology-sector respondents cited regulatory uncertainty as their primary concern.
The Details
Five concrete changes foreign investors should know:
- Wholly foreign-owned R&D centers. Foreign companies can now establish 100% owned R&D centers in all FTZs and in 19 designated technology development zones — up from 26 zones previously. The minimum registered capital requirement has been removed entirely.
- Expedited tech import contracts. Technology import contract registration, previously requiring 20 business days, is reduced to 5 business days for contracts valued under RMB 5 million (US$690,000). The threshold doubles to RMB 10 million for companies in FTZs.
- Foreign VC access to local renminbi funds. Qualified foreign venture capital enterprises (QFVCEs) can now invest in local RMB-denominated tech funds without going through the full QFII approval process — cutting setup time from 6 months to approximately 6 weeks.
- Expedited work visas for tech talent. R&D personnel transferred to China-based R&D centers now qualify for a 5-year residence permit with simplified documentation — no employer letter required, just the R&D center registration certificate.
- Data transfer facilitation for R&D. Technical data used in cross-border R&D collaboration (test results, prototype specifications, quality metrics) is exempted from the full security assessment, provided it is classified as non-sensitive under the company’s own data classification system.
What You Should Do
The window of fastest implementation is the next 90 days. MOFCOM has instructed provincial commerce departments to establish single-window processing for all five measures by September 30, 2026. Early adopters will benefit before processing capacity becomes strained.
If your company is considering a China R&D center, the removal of the minimum capital requirement and the wholly foreign-owned option make the FTZ locations the most attractive starting point. Compare your options across China’s key zones in our guide to where to invest in China in 2026 and review the practical steps in our remote China entry playbook for companies setting up without a physical office.
Note: These measures apply to R&D centers, not commercial operations. Service-sector and trading companies operate under different rules — consult a qualified advisor before structuring.
One Data Point
The number to remember: 6 weeks — the new timeline for foreign VC access to RMB tech funds, down from 6 months. For a fund deploying US$10 million, that 18-week compression translates to roughly US$1.2 million in additional time-value of capital at current rates.
— China Gateway 360 —
Remote China market entry support, built around execution.