Due to the foreign exchange control in mainland China, Chinese mainland enterprises investing and setting up subsidiaries (such as Hong Kong subsidiaries) can only register with the provincial Department of Commerce and Provincial Development and Reform Commission respectively. After the approval, the investment funds can be transferred to the investment subsidiaries through foreign exchange purchase. After the profits earned by the overseas subsidiaries, the profits of the Hong Kong subsidiaries will be distributed to the parent companies in mainland China.

Foreign investment by natural persons cannot be put on record at present, because the state does not allow foreign investment in the name of natural persons. The following industries are relatively sensitive to foreign investment, such as:1Development, production and maintenance of weapons and equipment;2Cross-border water resources development and utilization;3) News media;4) real estate;5) Hotel;6) Cinema;7) entertainment industry;8) Sports clubs;9) Equity investment funds or investment platforms without specific industrial projects established overseas.

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