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Law of the PRC on Foreign-Captial
Enterprises
Article 01 With a view to expanding economic cooperation
and technical exchange with foreign countries and promoting
the development of China's national economy, the People's Republic
of China permits foreign enterprises, other foreign economic
organizations and individuals (hereinafter collectively referred
to as "foreign investors") to set up enterprises with
foreign capital in China and protects the lawful rights and
interests of such enterprises.
Article 02 As mentioned in this Law, "enterprises
with foreign capital" refers to those enterprises established
in China by foreign investors, exclusively with their own capital,
in accordance with relevant Chinese laws. The term does not
include branches set up in China by foreign enterprises and
other foreign economic organizations.
Article 03 Enterprises with foreign capital shall be
established in such a manner as to help the development of China's
national economy; they shall use advanced technology and equipment
or market all or most of their products outside China.
Provisions shall be made by the State Council regarding the
lines of business which the state forbids enterprises with foreign
capital to engage in or on which it places certain restrictions.
Article 04 The investments of a foreign investor in China,
the profits it earns and its other lawful rights and interests
are protected by Chinese law.
Enterprises with foreign capital must abide by Chinese laws
and regulations and must not engage in any activities detrimental
to China's public interest.
Article 05 The state shall not nationalize or requisition
any enterprise with foreign capital. Under special circumstances,
when public interest requires,enterprises with foreign capital
may be requisitioned by legal procedures and appropriate compensation
shall be made.
Article 06 The application to establish an enterprise
with foreign capital shall be submitted for examination and
approval to the department under the State Council which is
in charge of foreign economic relations and trade, or to another
agency authorized by the State Council.
The authorities in charge of examination and approval shall,
within 90 days from the date they receive such application,
decide whether or not to grant approval.
Article 07 After an application for the establishment
of an enterprise with foreign capital has been approved, the
foreign investor shall, within 30 days from the date of receiving
a certificate of approval, apply to the industry and commerce
administration authorities for registration and obtain a business
licence.
The date of issue of the business licence shall be the date
of the establishment of the enterprise.
Article 08 An enterprise with foreign capital which meets
the conditions for being considered a legal person under Chinese
law shall acquire the status of a Chinese legal person, in accordance
with the law.
Article 09 An enterprise with foreign capital shall make
investments in China within the period approved by the authorities
in charge of examination and approval. If it fails to do so,
the industry and commerce administration authorities may cancel
its business licence.
The industry and commerce administration authorities shall inspect
and supervise the investment situation of an enterprise with
foreign capital.
Article 10 In the event of a separation, merger or other
major change, an enterprise with foreign capital shall report
to and seek approval from the authorities in charge of examination
and approval, and register the change with the industry and
commerce administration authorities.
Article 11 The production and operating plans of enterprises
with foreign capital shall be reported to the competent authorities
for the record.
Enterprises with foreign capital shall conduct their operations
and management in accordance with the approved articles of association,
and shall be free from any interference.
Article 12 When employing Chinese workers and staff,
an enterprise with foreign capital shall conclude contracts
with them according to law, in which matters concerning employment,
dismissal, remuneration, welfare benefits,labour protection
and labour insurance shall be clearly prescribed.
Article 13 Workers and staff of enterprises with foreign
capital may organize trade unions in accordance with the law,
in order to conduct trade union activities and protect their
lawful rights and interests.
The enterprises shall provide the necessary conditions for the
activities of the trade unions in their respective enterprises.
Article 14 An enterprise with foreign capital must set
up account books in China,conduct independent accounting, submit
the fiscal reports and statements as required and accept supervision
by the financial and tax authorities.
If an enterprise with foreign capital refuses to maintain account
books in China, the financial and tax authorities may impose
a fine on it, and the industry and commerce administration authorities
may order it to suspend operations or may revoke its business
licence.
Article 15 Within the scope of the operations approved,
enterprises with foreign capital may purchase, either in China
or from the world market, raw and semi-processed materials,
fuels and other materials they need. When these materials are
available from both sources on similar terms, first priority
should be given to purchases in China.
Article 16 Enterprises with foreign capital shall apply
to insurance companies in China for such kinds of insurance
coverage as are needed.
Article 17 Enterprises with foreign capital shall pay
taxes in accordance with relevant state provisions for tax payment,
and may enjoy preferential treatment for reduction of or exemption
from taxes.
An enterprise that reinvests its profits in China after paying
the income tax, may, in accordance with relevant state provisions,
apply for refund of a part of the income tax already paid on
the reinvested amount.
Article 18 Enterprises with foreign capital shall handle
their foreign exchange transactions in accordance with the state
provisions for foreign exchange control.
Enterprises with foreign capital shall open an account with
the Bank of China or with a bank designated by the state agency
exercising foreign exchange control.
Enterprises with foreign capital shall manage to balance their
own foreign exchange receipts and payments. If, with the approval
of the competent authorities, the enterprises market their products
in China and consequently experience an imbal ance in foreign
exchange, the said authorities shall help them correct the imbalance.
Article 19 The foreign investor may remit abroad profits
that are lawfully earned from an enterprise with foreign capital,
as well as other lawful earnings and any funds remaining after
the enterprise is liquidated.
Wages, salaries and other legitimate income earned by foreign
employees inan enterprise with foreign capital may be remitted
abroad after the payment of individual income tax in accordance
with the law.
Article 20 With respect to the period of operations of
an enterprise with foreign capital, the foreign investor shall
report to and secure approval from the authorities in charge
of examination and approval.
For an extension of the period of operations, an application
shall be submitted to the said authorities 180 days before the
expiration of the period.
The authorities in charge of examination and approval shall,
within 30 days from the date such application is received, decide
whether or not to grant the extension.
Article 21 When terminating its operations, an enterprise
with foreign capital shall promptly issue a public notice and
proceed with liquidation in accordance with legal procedure.
Pending the completion of liquidation, a foreign investor may
not dispose of the assets of the enterprise except for the purpose
of liquidation.
Article 22 At the termination of operations, the enterprise
with foreign capital shall nullify its registration with the
industry and commerce administration authorities and hand in
its business licence for cancellation.
Article 23 The department under the State Council which
is in charge of foreign economic relations and trade shall,
in accordance with this Law, formulate rules for its implementation,
which shall go into effect after being submitted to and approved
by the State Council.
Article 24 This Law shall go into effect on the day of
its promulgation
Feel free to contact us if you have any question or need of any assistance.
Shanghai & East China Office:
Tang Ning (Shanghai) Ltd.
Address: Suite 9B, Yinli Building, 485 HeNan (North) Road, Shanghai 200071 [ MAP ]
Operation Time: Monday to Friday 9:00AM-17:30PM
National holiday: May 1st - May 4st
Tel: (8621) 5108.8535 (You can inquire in English)
Fax: (8621) 5102.5277
Regional Partner: Mr. Li Jun
Mobile: (86)1360.1680.738
E-mail: info@pathtochina.com
Beijing & North China Office:
Address: 5/F CBD International Mansion, 16 Yong'An Dong Li, Chao Yang District, Beijing [ MAP ]
Operation Time: Monday to Friday 9:00AM-17:30PM
National holiday: May 1st - May 4st
Tel: (8610) 6300.3120 (You can inquire in English)
Regional Partner: Ms. Mira Abdulhimit
Mobile: (86) 1343.645.8667
Email: sales@pathtochina.com
Hong Kong Office:
Address: Suite 1701, Henan Building, 92 Jaffe Road, Wanchai, Hong Kong
Tel: (852) 8198.0086
Mobile: (852) 6877.8862
Fax: (852) 8198.0080
Email: hk@pathtochina.com
U.S. Liaison:
3801 E. Florida Ave. Suite 412, Denver, CO 80210
Tel: (303) 8006616
Fax: (303) 8006616
Email: us@pathtochina.com
Any enquiries from
Australia & New Zealand
Please Contact:
(02) 8005.0506
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Shanghai Office:
Suite 9B, Yinli Building,
485 HeNan (N.) Road,
Shanghai, China 200071
[ MAP ]
Tel: (8621) 5108.8535
Fax: (8621) 5102.5277
Regional Partner:
Mr. Li Jun
M: (86) 1360.1680.738
E-mail:
info@pathtochina.com
Beijing Office:
5/F CBD Int'l Mansion,
No.16 Yong'An Dong Li,
Chao Yang District,
Beijing, China 100022
[ MAP ]
Tel: (8610) 6300.3120
Regional Partner:
Ms. Mira Abdulhimit
M: (86) 1343.645.8667
E-mail:
sales@pathtochina.com
Hong Kong Office:
Suite 1701, Henan Building, 92 Jaffe Road, Wanchai, H.K.
Tel: (852) 8198.0086
M: (852) 6877.8862
Fax: (852) 8198.0080
Email:
hk@pathtochina.com
U.S. Liaison:
3801E. Florida Ave. Suite 412 Denver, Co. 80210
Tel: (303) 8006616
Fax: (303) 8006616
Email:
us@pathtochina.com
Any enquiries from
Australia & New Zealand
Please Contact:
(02) 8005.0506
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