Ecovis in Cambodia

China’s 2025 investment framework: What global businesses need to know

On 19 February 2025, China unveiled a comprehensive action plan to stabilise and promote foreign investment. The plan includes various strategic measures which the government aims to use to attract and retain foreign capital.

China’s 2025 action plan aims to attract foreign investment, enhance economic stability, and modernise key industries. It focuses on refining the Invest in China brand, strengthening cooperation between central and local governments, and ensuring equal treatment for foreign-invested enterprises (FIEs).

The plan encourages reinvestment by directing capital into advanced manufacturing, modern services, and underdeveloped regions. To simplify foreign mergers and acquisitions, China will streamline regulations and lower barriers for cross-border transactions, explain the Ecovis consultants. Additionally, easing loan restrictions and supporting regional headquarters for multinational corporations will foster long-term investment. Transparency initiatives, such as regular policy briefings, further reinforce China’s commitment to an open and competitive business environment.

Key measures of China’s 2025 investment framework

China’s 2025 foreign investment action plan outlines 20 key measures to further open its economy and maintain a stable investment climate. These measures impact businesses across various industries, including manufacturing, services, telecom, healthcare, and education, regardless of their listing status.

We can advise you on market entry in China, on M&A transactions and support you in obtaining regulatory approvals.

Richard Hoffmann, Lawyer, ECOVIS Rechtsanwaltskanzlei Richard Hoffmann, Ladenburg, Germany

• Encouraging foreign investment: Develop operational guidelines for strategic investment and enhance promotional efforts to attract long-term foreign capital in listed firms.
• Supporting reinvestment: Improve the business environment, ensure equal treatment for foreign enterprises, and introduce policies to encourage reinvestment of profits, including pilot programmes for investment reporting.
• Facilitating mergers & acquisitions: Amend regulations under the foreign investment law to simplify M&A procedures, expand management scope, and ease restrictions on cross-border share swaps.

What China wants to achieve with the action plan

China’s new action plan reaffirms its commitment to attracting foreign investment by expanding market access, simplifying processes, and promoting fair competition. Despite challenges, its focus on high-tech growth, green industries, and global integration signals new opportunities. While the effectiveness of these measures remains uncertain, China’s proactive approach aims to sustain investment and economic stability in 2025 and beyond.

For further information please contact:

Richard Hoffmann, Lawyer, ECOVIS Rechtsanwaltskanzlei Richard Hoffmann, Ladenburg, Germany
Email: richard.hoffmann@ecovis.com

How to close a company in the Netherlands: ‘Turbo’ liquidation of a Dutch legal entity

In the Dutch legal system, there are two ways to dissolve a legal entity: formal dissolution proceedings and “turbo liquidation.” A law amending the legal provisions on turbo liquidation came into force on 15 November 2023. International companies in particular are struggling with these new regulations. The Ecovis experts explain the details.

While the formal dissolution procedure is subject to several legal requirements, such as a two-month objection period and publication in a national newspaper, turbo liquidation comes into effect when a legal entity has no assets at the time of the dissolution resolution (by the shareholders). In this case, the legal entity automatically ceases to exist once this resolution takes effect.

What the new law on turbo liquidation means

There have been concerns about the misuse of turbo liquidation, especially when a legal entity with debts applies for the procedure. Since the entity is automatically dissolved when it has no assets, it does not need to account to creditors. If a creditor wishes to claim from the entity, it may no longer exist. The bill aims to increase transparency, improve the position of creditors, and combat misuse of the procedure. This should ultimately enhance trust in the use of turbo liquidation.

The bill introduces a requirement for management boards to disclose certain financial information when opting for turbo liquidation. In the event of non-compliance, management board members can be banned from acting as directors in the future. Additionally, it increases the ability of creditors to access information.

Do you need to dissolve a company in the Netherlands? We can help you ensure the process is legally compliant.

Allard Schuering, civil-law notary and partner KienhuisLegal – Member of ECOVIS International, Utrecht, Netherlands

How it works

In addition to the (shareholders) resolution to dissolve a legal entity without assets, the legal entity will be required to file certain documents with the trade register of the Dutch Chamber of Commerce. These documents include financial statements for the final year in which the entity is dissolved and the previous year if no financial statements have been made public, an explanation of the reason for the lack of assets and the existence of debts and, if applicable, how the assets were liquidated before the dissolution.

The board is also obliged to inform creditors in writing. Failure to comply will be punishable under the Economic Offenses Act. The penalty may include removal from the trade register and a ban for the managing director meaning that he/she cannot act as a managing director of any Dutch legal entity for the next five years. In the case of dissolution without assets, the managing director ban included in the Bankruptcy Act also applies. The Public Prosecution Service can also request a managing director ban.

Conclusion

The new law aims to improve the position of creditors and enhance the image of the turbo liquidation process. In practice, it means that there are more requirements that must be met before a company can be dissolved, even in a simplified manner.

For further information please contact:

Allard Schuering, civil-law notary and partner KienhuisLegal – Member of ECOVIS International, Utrecht, Netherlands
Email: Allard.Schuering@KienhuisLegal.nl

New Regulations on Tax Management For Enterprises with Related-Party Transactions in Vietnam

On 10 February 2025, the Vietnamese government introduced changes to the tax rules for companies with related-party transactions, aimed at simplifying key areas. The changes include clearer rules on bank loans, updated definitions of related parties and adjustments to non-deductible interest expenses. The experts from ECOVIS AFA Vietnam explain these updates in detail.

After the period of publication of the Draft Decree amending the Government Decree No. 132/2020/ND-CP (Decree 132) regulating the tax management of enterprises with related party transactions dated 5 November 2020 to gather opinions from ministries, government departments and the business community, the Government officially issued Decree No. 20/2025/ND-CP (Decree 20) amending and supplementing Decree 132 on 10 February 2025. The main amendments and additions to Decree 20 are summarised below:

1. Decree 20 supplements the case of exclusion of companies that guarantee or lend to other companies as stipulated in Point d, Paragraph 2, Article 5 of Decree 132. Accordingly, the lenders, the guarantors being the credit institutions, are not considered as related parties if they do not participate in the activities of “operation, control, capital contribution, investment” in the borrowing enterprise or the guaranteed enterprise.=> This is the most notable content of this revised decree. Previously, Decree 132 created obstacles for many companies when they borrowed capital from banks for production and business activities, inadvertently falling into the case of determining the affiliation relationship and having to bear the control level of deductible interest expenses, while the enterprise and the bank are completely independent, without control, management, operation, capital contribution or investment in the production and business activities of the enterprise.
2. Decree 20 clarifies the responsibility for declaration and payment of taxes for independent accounting branches with related parties (previously not clearly regulated).
3. Decree 20 supplements cases of related parties to synchronise with changes in the law on credit institutions: Credit institutions and subsidiaries or controlling companies or associated companies of credit institutions as prescribed in the Law on Credit Institutions and amended, supplemented or replaced documents (if any);
4. In addition, the Decree clarifies the provisions on transferring non-deductible interest expenses of previous tax periods when the enterprise only has a related relationship through borrowing capital from a credit institution according to Point d, Clause 2, Article 5, Decree 132.
   If an enterprise does not have a related party relationship and does not enter into related party transactions as provided for in Decree 132 and Decree 20, the non-deductible interest expense that has not been carried over to the following tax periods by the end of the 2023 tax period must be carried over evenly to the following consecutive tax periods for no more than five years from the year following the year in which the non-deductible interest expense is incurred.If an enterprise has related relationships and related transactions in tax period 2024, non-deductible interest expenses of previous tax periods cannot be carried forward to the next five years.
5. Decree 20 also extends the responsibility of the State Bank of Vietnam in providing information of the related individuals and related enterprises of credit institutions upon request from the Tax Authority.
6. At the same time, Decree 20 amends Appendix I – Information of related party relationships and related-party transactions to align with the amended, supplemented regulations mentioned above.

Decree 20 was officially issued on February 10, 2025 and will apply from the 2024 tax year.

The above content has been researched and summarised by ECOVIS AFA VIETNAM from widely published legal documents and articles. If you would like to discuss more in-depth issues, please contact us using the information below:

Nghia Tran, Partner, ECOVIS AFA VIETNAM, Da Nang City, Vietnam
Email: Nghia.Tran@ecovis.com.vn