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Rules for the Implementation of the Law of the People\'s Republic of China on Foreign-Capital Enterprises
（Approved by the State Council on October 28, 1990 and promulgated by the Ministry of Foreign Economic Relations and Trade on December 12, 1990; Firstly Amended as per Decision of Amendment of Rules for the Implementation of the Law of the People\'s Republic of China on Foreign-Capital Enterprises of the State Council; Secondly Amended as per Decision of Abolishing and Amendment of Part of Administrative Laws And Regulations of the State Council on February 19th, 2014）
Chapter I General Provisions
Article 1 These Rules are formulated in accordance with the provisions of The Law of the People\'s Republic of China on Foreign-Capital Enterprises.
Article 2 Foreign-capital enterprises shall be under the jurisdiction and protection of China\'s laws.
Foreign-capital enterprises shall abide by Chinese laws and regulations and shall not jeopardize the social and public interests of China in business operational activities within the territory of China,.
Article 3 The foreign-capital enterprise to be established in China shall be conducive to the development of China\'s national economy and be capable of gaining remarkable economic benefits. The state encourages foreign-capital enterprises to adopt advanced technology and equipment, engage in the development of new products, realize the upgrading of products and conserve energy and raw materials and encourages foreign-capital enterprises to export products.
Article 4 The industries in which foreign-capital enterprises are prohibited or restricted to establish shall be determined in accordance with provisions of the state in the regulations on foreign investment
guidelines and the Catalogue of Industries for Guiding Foreign Investment.
Article 5 Application for the establishment of the foreign-capital enterprise shall not be approved if the proposed enterprise would involve one of the following：
（1）Injury to China\'s sovereignty or to social and public interests；
（2）Impairment of China\'s national security；
（3）Violation of Chinese laws and regulations；
（4）Incompatibility with the requirements of China\'s national economic development;or
（5）Possible creation of environmental pollution.
Article 6 The foreign-capital enterprise shall make its own managerial decisions within the approved scope of business operations and shall not be subject to intervention.
Chapter II Procedures for Establishment
Article 7 The application for the establishment of the foreign-capital enterprise shall be submitted to the Ministry of Foreign Trade and Economic cooperation,PRC (hereinafter referred to as Ministry of Foreign Trade and Economic Cooperation ) for examination and approval and a certificate of approval shall be issued by the Ministry thereafter.
With respect to the application for the establishment of the foreign-capital enterprise that comes under one of the following circumstances, the State Council shall authorize the people\'s government of the relevant province, autonomous region, municipality directly under the Central Government, municipality with Independent planning status under the National Social and Economic Development or special economic zone to issue the certificate of approval after examining and approving the application.
（1）The total investment amount is within the limits of powers for the examination and approval of investments stipulated by the State Council；
（2）The proposed enterprises does not need the raw materials to be allocated by the State or does not influence unfavourably the national comprehensive balance of energy resources, communications and transportation, as well as export quotas for foreign trade etc.
Where the people\'s government of the province, autonomous region, municipality directly under the Central Government, municipality with Independent planning status under the National Social and Economic Development, or special economic zone has approved the establishment of the foreign-capital enterprise within its limits of powers granted by the State Council, it shall submit a report to the Ministry of Foreign Trade and Economic cooperation for the record within 15 days after the approval（hereinafter the Ministry of Foreign Trade and Economic cooperation, the people\'s government of the province, autonomous region, municipality directly under the Central government, municipality with Independent planning status under the National Social and Economic Development, and the special economic zone shall be called generally as the examining and approving organ）。
Article 8 The application for establishement of the foreign-capital enterprise shall be subject to the prior consent of the competent department of foreign economic relations and trade in accordance with the limits of powers for administration if the products are subject to export license, export quota, or import license, or are under restrictions by the State,.
Article 9 A foreign investor shall submit a report to the local people\'s government at or above the county level at the place where the proposed enterprise is to be established prior to the filing of an application for the establishment of the foreign-capital enterprise. The report shall include： the aim of the establishment of the proposed enterprise;the scope and scale of business operation;the products to be produced;the technology and equipment to be adopted and used；the area of land to be used and the related requirements;the conditions and quantities of water, electricity, coal, coal gas and other forms of energy resources required;and the requirement for public facilities.
The local people\'s government at or above the county level shall respond in writing to the foreign investors within 30 days after receiving the report submitted by foreign investors.
Article 10 In case that a foreign investor wishes to establish the foreign-capital enterprise,an application shall be submitted to the examining and approving organ through the local people\'s government at or above the county level at the place where the enterprise is to be established together with the following documents.
（1） Application for establishment of the foreign-capital enterprise；
（2） Feasibility study report；
（3） The Articles of Association of the foreign-capital enterprise；
（4） The name list of the legal representative （or the candidates for members of the board of directors） of the foreign-capital enterprise；
（5） The legal authentication documents and the credit authentication documents of the foreign investors；
（6） The written reply given by the people\'s government at or above the county level at the place where the enterprise is to be established；
（7） An inventory of goods and materials needed to be imported；
（8） Other documents that are required to be submitted.
The documents mentioned in items （1） and （3） in the preceding paragraph must be written in the Chinese language;while the documents mentioned in Items （2）, （4） and （5） in the preceding paragraph may be written in a foreign language,to which the corresponding Chinese translation shall be attached.
In the event that two or more foreign investors jointly file an application for the establishment of a foreign capital enterprise, they shall submit a duplicate of the contract concluded and signed by and between them to the examining and approving organ for the record.
Article 11 The examining and approving organ shall make a decision whether to approve or disapprove the application within 90 days after receiving all the required documents with respect to an application for the establishment of foreign-capital enterprise. In the event that the examining and approving organ has found that the documents mentioned above are not complete or inappropriate,it may ask the applicant to make up for the incomplete documents or to make necessary revisions within a prescribed time limit.
Article 12 After the approval of the application for the establishment of the foreign-capital enterprise by the examining and approving organ,the foreign investors shall file an application for registration with the relevant industry and commerce administration authorities and obtain a business license within 30 days after receiving the certificate of approval. The issue date of the business license shall be the date of the establishment of the said enterprise.
In the event that the foreign investor fails to file an application with the industry and commerce administration authorities for registration within 30 days after receiving the certificate of approval,the certificate of approval for the establishment of the proposed enterprise shall become invalid automatically.
The foreign-capital enterprise shall process taxation registration with the tax authorities within 30 days after its establishment.
Article 13 Foreign investors may appoint a Chinese service agency for enterprises with foreign investment or other economic organizations to handlethe affairs stipulated in Article 8, the First Paragraph of Artical 9 and Article 10 of these Rules on their behalf, but a contract of entrustment shall be concluded and signed by and between them.
Article 14 The application for the establishment of the foreign-capital enterprise shall include the following contents：
（1）The name or designation,the residence and the place of registration of the foreign investor and the name, nationality, and position of the legal representative；
（2）The name and residence of the foreign-capital enterprise to be established；
（3）The scope of business operations,the product varieties and the production scale；
（4）The total investment amount, the registered capital, the source of funds and the method of investment contribution and the operation period；
（5）The organizational form and organs and the legal representative of the foreign-capital enterprise to be established；
（6）The primary production equipment to be used and the degrees of depreciation, production technology, technological level and the sources thereof；
（7）The sales direction , sales areas,sales channels and methods of the products;
（8）The arrangements for the revenues and expenditures in foreign exchange；
（9）The arrangements for the establishment of relevant organs and personnel, the engagement and use of workers and staff members,training,salaries and wages,welfares,insurance and labor protection；
（10）The degrees of probable environmental pollution and the measures for tackling the pollution；
（11）The selection of sites and the area of land to be used；
（12）The funds,energy resources,raw materials needed in basic construction and production and business operations and the solutions thereof；
（13）The progress plan for the construction of the project;and
（14）The period of business operations of the foreign-capital enterprise to be established.
Article 15 The Articles of Association of the foreign-capital enterprise shall include the following contents：
（1）The name and the residence；
（2）The aim and the scope of business operations；
（3）The total investment amounts, the registered capital,the subscribed capital,the method and time limit for contributing investment；
（4）The form of organization；
（5）The internal organizational structures and the functions and powers as well as their rules of procedures;the functions, duties and limits of powers of the legal representative as well as of the general manager, chief engineer, chief accountant and other staff members；
（6）The principles and system of financing, accounting and auditing；
（7）Labor management；
（8）The term of business operations, termination, and liquidation;and
（9）The procedures for the amendment of the Articles of Association.
Article 16 The Articles of Association of the foreign-capital enterprise shall become effective after the approval by the examining and approving organ. The same procedure shall apply when amendments thereof are made.
Article 17 The division or merge of foreign-capital enterprises and the significant change of capital resulting from other causes shall be subject to the approval by the examining and approving organ;in addition, the said enterprises shall engage Chinese CPA to carry out verification and to issue a capital verification report; The enterprises concerned shall go through the procedures for the change of registration with the relevant industry and commerce administration authorities after the approval by the examining and approving organ.
Chapter III Form of Organization and Registered Capital
Article 18 The organizational form of the foreign-capital enterprise shall be a company with limited liability. The enterprise may also take any other liability form with approval,.
The liability of the foreign investors to the enterprise shall be limited to the subscribed investment amount by the investor to the enterprise if the foreign-capital enterprise is a company with limited liability.
The liability of the foreign investor to the enterprise shall be dealt with in accordance with the provisions of Chinese laws and regulations if the foreign-capital enterprise takes any other liability form.
Article 19 The total investment amount of the foreign-capital enterprise refers to the total amount of funds needed for the establishment of the enterprises, i. e. the total of the funds invested in basic construction in accordance with the production scale and the circulating funds for production.
Article 20 The registered capital of the foreign-capital enterprise refers to the total capital amount registered with the industry and commerce administration authorities for the purpose of establishing the foreign-capital enterprise, i. e the total investment amount subscribed by the foreign investors.
The proportion between the registered capital and the total investment amount of the foreign-capital enterprise shall conform with the provisions of the relevant Chinese laws and regulations.
Article 21 The foreign-capital enterprise shall not reduce the registered capital during the term of business operations. But a reduction of the registered capital really needed due to changes of total investment amount and production and business operation shall be subject to the examination and approval of the examining and approving organs.
Article 22 The increase or transfer of the registered capital of the foreign-capital enterprise shall be subject to approval by the examining and approving organ;in addition, the said enterprise shall go through the procedures for the change of registration with the industry and commerce administration authorities.
Article 23 Mortgage or transfer of the assets or rights and interests of the foreign-capital enterprise to other parties shall be subject to approval of the examining and approving organ and the filing of record with the industry and commerce administration authorities.
Article 24 The legal representative of the foreign-capital enterprise shall be the person-in-charge who executes functions and powers on behalf of the enterprise in accordance with the stipulations of Articles of Association of the enterprise.
In the event that the legal representative is unable to execute the functions and powers, he shall entrust in writing an agent to execute the functions and powers on behalf of him.
Chapter IV Mode and Term of Investment
Article 25 Foreign investors may make contribution of investment with convertible foreign currencies or investment machinery and equipment, industrial property rights and proprietary technology that are valued at a fixed price.
Foreign investors may use profits in Renminbi earned from other enterprises with foreign investment established within the territory of China as investment contribution after approval by the examining and approving organ.
Article 26 In case that foreign investors intend to use machinery and equipment valued at a fixed price to make contribution of investment, the said machinery and equipment shall be necessary for the production of the foreign-capital enterprise；
The price fixed for the aforesaid machinery and equipment shall not be higher than the normal price for similar machinery and equipment sold in the international market at the time.
With respect to the machinery and equipment valued at a fixed price to make contribution of investment, an inventory listing in detail the valuation of fixed prices as contribution of investment, including the names, categories, quantities, and the prices valued shall be made and submitted to the examining and approval organ as an appendix to the Application for the Establishment of the Foreign-capital Enterprise.
Article 27 In case that foreign investors intend to use industrial property rights and proprietary technology valued at a fixed price to make contribution of investment, the said industrial property rights and proprietary technology must be owned by the foreign investors；
With respect to the aforesaid industrial property rights and proprietary technology valued at a fixed price to make contribution of investment, a detailed inventory of relevant data including a duplicate of the proprietary rights certificate, the validity status, the technological performance, the practical value, the basis and standard for the calculation of pricing, shall be prepared and submitted to the examining and approving organ as an appendix to the Application for the Establishment of the Foreign-capital Enterprise.
Article 28 When the machinery and equipment valued at a fixed price to make contribution of investment have arrived at China\'s port, the foreign-capital enterprise shall apply to China\'s commodity inspection authorities for inspection and issue of an inspection report.
In the event that the variety, quality and quantity of the machinery and equipment valued at a fixed price to make contribution of investment is not in conformity with the variety, quality and quantity of the machinery and equipment valued at a fixed price to make contribution of investment listed in the inventory submitted to the examining and approving organ, the examining and approving organ has the power to require the foreign investors to make corrections within a prescribed time limit.
Article 29 After the industrial property rights and proprietary technology priced as contributing investment have been put into use, the examining and approving organ has the power to carry out inspection thereupon. In the event that the said industrial property rights and proprietary technology are not in conformity with the data originally provided by the foreign investors, the examining and approving organ has the power to require the foreign investors to make corrections within a prescribed time limit.
Article 30 The time limit for a foreign investor to make the investment contributions shall be clearly stipulated in the Application for the Establishment of the Foreign-capital Enterprise and the Articles of Association of the enterprise.
Chapter V Land Use and Relevant Fees
Article 31 The land to be used by the foreign-capital enterprise shall be arranged by the local people\'s government at or above the county level in the place where the enterprise is to be located after examination and verification in the light of the local conditions.
Article 32 The foreign-capital enterprise shall go through the procedure for the use of land and obtain the land certificate by presenting the certificate of approval and the business license to the land administration department under the local people\'s government at or above the county level in the place where the enterprise is to be located within 30 days after the issue of the business license.
Article 33 The land certificate shall be the legal instrument for the foreign-capital enterprise to use land. The foreign-capital enterprise may not assign its land-use right without permission within its term of operations.
Article 34 The foreign-capital enterprise shall pay its land use fee to the land administration department in the place where the enterprise is located when obtaining the land certificate,.
Article 35 The foreign-capital enterprise shall pay the land development fee for use of the land that has already been developed.
The aforesaid land development fee includes the expense for the requisition of land, the expense for the pulling down of houses and the settlement allowance and the expense for the construction of basic installations that match the foreign-capital enterprise. The land development fee may be calculated and collected by the land development unit in a lump-sum or by yearly instalments.
Article 36 In case that a foreign-capital uses land that has not been developed, it may develop the land by itself or it may entrust a department concerned in China to develop the land.
The infrastructure construction shall be carried out under the unified arrangement of the local people\'s government at or above the county level in the place where the enterprise is to be located.
Article 37 The standard for the calculation and collection of land use fee and land development fee of the foreign-capital enterprise shall be handled in accordance with pertinent provisions of China.
Article 38 The term for the use of land by the foreign-capital enterprise shall be the same as the approved operation period of the said enterprise.
Article 39 Besides obtaining the land-use right in accordance with the provisions of this Chapter, the foreign-capital enterprise may also obtain the same right in accordance with the pertinent provisions of other Chinese laws and regulations.
Chapter VI Purchasing and Marketing
Article 40 The foreign-capital enterprise is entitled to make decisions on the purchase of machinery and equipment, raw materials, fuels, parts and components, fittings, primary parts, means of transport, and articles for office use （hereinafter uniformly referred to as “goods and materials”） for its own use。
The foreign-capital enterprise shall enjoy the same treatment as enjoyed by the Chinese enterprises when purchasing goods and materials in China under the same conditions,.
Article 41 The foreign-capital enterprise may sell its products in the Chinese market. The state encourages foreign-capital enterprises to export its own products.
Article 42 The foreign-capital enterprise is entitled to export goods produced by itself; or it may also appoint a Chinese foreign trade company or a company outside the territory of China to sell its goods on a commission basis.
The foreign-capital enterprise is entitled to sell the products produced by itself in the Chinese market; or it may also appoint a Chinese commercial agency to sell its products on a commission basis.
Article 43 Where the foreign investors take machinery and equipment valued at a fixed price as contribution of investment,for which import licenses are required according to the provisions of China, the foreign investors shall file directly on his own or entrust an agency to file an application with the license-issuing organ for obtaining import licenses on the strength of the approved inventory of equipment and goods and materials of the said enterprise to be imported,.
Where the foreign-capital enterprise needs to import goods and materials for its own use in production within the approved business scope, for which import licenses are required according to the provisions of China, it shall work out an annual plan for importation and apply to the license-issuing organ for the licenses every six months.
Where the foreign-capital enterprise needs to export goods and materials, for which export licenses are required according to the provisions of China, it shall work out an annual plan for export and apply to the license-issuing organ for the licenses every six months.
Article 44 The prices of the goods and materials and technological labor service imported by the foreign-capital enterprise shall not be higher than the normal prices of similar goods and materials and technological labour service in the international market at the time. The price of exported products produced by the foreign-capital enterprise shall be fixed by itself with reference to the international market prices at the time, but the prices shall not be lower that the reasonable export prices. With respect to the evasion of tax by using such methods as importing at high prices while exporting at low prices etc., the tax authorities shall have the power to seek the legal responsibilities from the aforesaid enterprise in accordance with the provisions of the tax laws.
Article 45 The foreign-capital enterprise shall provide statistical data and submit statistical statements in accordance with the provisions of the Statistics Law of the People\'s Republic of China and the relevant provisions of China concerning the statistical system for the utilization of foreign capital.
Chapter VII Taxation
Article 46 The foreign-capital enterprise shall pay taxes and duties in accordance with the provisions of Chinese laws and regulations.
Article 47 The workers and staff members of the foreign-capital enterprise shall pay personal income tax in accordance with the provisions of Chinese laws and regulations.
Article 48 The taxes imposed on the following goods and materials imported by the foreign-capital enterprise shall be reduced or exempted in accordance with the provisions of Chinese tax laws；
（1）The machinery and equipment, parts and components, building materials as well as materials for installation and reinforcement of machinery used as investment by the foreign investors；
（2）The machinery and equipment, parts and components, vehicles of communications and transportation for use in production and production and management equipment imported for their own use by the foreign-capital enterprise with the funds included in the total investment amount；
（3）The raw materials materials, auxiliary materials, parts, components and packaging materials imported by the foreign-capital enterprise for the production of export products.
If the aforesaid imported goods and materials are resold within the territory of China or are used for production of products to be sold within the territory of China, the foreign-capital enterprise shall pay the taxes or make up for the taxes in accordance with the provisions of the tax law of China.
Article 49 Taxes on the export commodities produced by the foreign-capital enterprise shall be reduced, exempted or refunded in accordance with the tax law of China except the export of those is restricted by China.
Chapter VIII Administration of Foreign Exchange
Article 50 Foreign exchange affairs of the foreign-capital enterprise shall be handled with in accordance with the pertinent laws and regulations of China concerning foreign exchange administration.
Article 51 The foreign-capital enterprise shall open an account with a bank which can handle with foreign exchange business within the territory of China on the strength of the business license issued by the industry and commerce administration authorities and its receipts and payments of foreign exchange thereof shall be subject to the supervision by the deposit bank.
The foreign exchange revenue of the foreign-capital enterprise shall be deposited in the foreign exchange account of the deposit bank; and the foreign exchange expenses shall be paid from the foreign exchange account.
Article 52 In case that the foreign-capital enterprise needs to open a foreign exchange account with a bank outside the territory of China to meet the needs of production and business operations, the enterprise shall obtain approval of the Chinese administration of foreign exchange and regularly report the status of revenues and expenditures in foreign exchange and provide bank statements of account in accordance with the provisions of the Chinese administration of foreign exchange.
Article 53 The wages and salaries as well as other rightful earnings in foreign exchange of foreign workers and staff members and of those from Hong Kong, Macao and Taiwan working in the foreign-capital enterprise may be remitted freely out of China after taxes have been paid in accordance with the provisions of the Chinese tax law.
Chapter IX Financial Accounting
Article 54 The foreign-capital enterprise shall set up financial and accounting systems in accordance with Chinese laws, regulations and the provisions of financial organs, which shall be reported for the record to the financial and the tax authorities at the place where the enterprise is located.
Article 55 The account year of the foreign-capital enterprise shall be from January 1st to December 31st of Gregorian calendar.
Article 56 Reserve funds and bonus and welfare funds for workers and staff members shall be withdrawn from the profits after the foreign-capital enterprise has paid income tax in accordance with the provisions of the Chinese tax law. The proportion of reserve funds to be withdrawn shall not be lower than 10% of the total amount of profits after tax;the withdrawal of reserve funds may be stopped when the total cumulative reserve has reached 50% of the registered capital. The proportion of bonus and welfare funds for workers and staff members to be withdrawn shall be determined by the foreign-capital enterprise in his own discretion.
No profits shall be distributed in the event that losses of previous account years of a foreign-capital have not been made up for; profits of previous account year may be distributed together with the distributable profits of the current account year.
Article 57 Accounting vouchers, account books and financial statements made by the foreign-capital enterprise shall be written in Chinese; if they are written in a foreign language, notes in the Chinese language are required.
Article 58 Business accounting of the foreign-capital enterprise shall be conducted independently.
The annual financial statements and liquidation financial statements of the foreign-capital enterprise shall be prepared in accordance with the provisions of the competent Chinese financial and tax authorities. If financial statements are prepared in foreign currencies, financial statements in which the foreign currencies are converted into Renminbi shall be prepared at the same time.
The foreign-capital enterprise shall appoint Chinese CPA to verify and issue report on the annual financial statements and liquidation financial statements.
The annual financial statements and liquidation financial statements of the foreign-capital enterprise, as stipulated in the Second and Third Paragraphs of this Article together with the verification report prepared by the Chinese CPA shall be submitted to the Chinese competent financial and tax authorities within a prescribed time limit and also to the examining and approving organ and the industry and commerce administration authorities for the record.
Article 59 The foreign investor may engage Chinese or foreign accountants to review the account books of the foreign-capital enterprise and the expenses thereof shall be borne by the foreign investor.
Article 60 The foreign-capital enterprise shall submit its annual balance sheet and income statement to the competent financial and tax authorities and also to the examining and approving organ as well as the industry and commerce administration authorities for the record.
Article 61 The foreign-capital enterprise shall set up account books at the place where the said enterprise is located and shall be subject to the supervision of the competent financial and tax authorities.
The competent financial and tax authorities may impose fines on any violation of the provisions in the preceding paragraph and the industry and commerce administration authorities may order to suspend the business operations or to revoke the business license.
Chapter X Workers and Staff Members
Article 62 In case that the foreign-capital enterprise employs workers and staff members within the territory of China, both the enterprise and the workers and staff members shall conclude and sign labor contracts in accordance with the Chinese laws and regulations. Matters such as employment, dismissal, salaries and wages, welfare, labor protection and labor insurance etc. shall be clearly stipulated in the contract.Foreign-capital enterprises shall not hire minor labourers.
Article 63 the foreign-capital enterprise shall provide business and technical training for the workers and staff members so that their production and management skills can meet the requirement of the production and development of the enterprise.
Chapter XI Trade Union
Article 64 The workers and staff members of the foreign-capital enterprise shall have the right to set up a grass-roots trade union organization and carry out trade union activities in accordance with the provisions of the Trade Union Law of the People\'s Republic of China.
Article 65 The trade union in the foreign-capital enterprise shall represent the interests of workers and staff members and shall have the right to conclude labor contracts with the enterprise on their behalf and to supervise the execution of the labour contracts.
Article 66 The basic tasks of the trade union in the foreign-capital enterprise shall be as follows： to safeguard the lawful rights and interests of workers and staff members in accordance with the provisions of Chinese laws and regulations and to assist the enterprise in the rational arrangements and use of welfare and bonus funds for the workers and staff members; to organize workers and staff members in studying politics, science and technology and professional knowledge, in carrying out cultural, artistic and sports activities;to educate workers and staff members in complying with labour discipline striving to complete various economic tasks of the enterprise.
Representatives of the trade union shall have the right to attend the discussions as nonvoting attendants when the foreign-capital enterprise holds discussions on problems concerning the commendation and punishment, the wage system, welfare benefits, labor protection and labor insurance of workers and staff members. The foreign-capital enterprise shall listen to the opinions of the trade union and win its cooperation.
Article 67 The foreign-capital enterprise shall give an active support to the work of the trade union of the enterprise and provide the trade union organization with the necessary houses and equipment for handling trade union work, holding meetings and conducting such collective undertakings as welfare benefits, cultural and sports activities for workers and staff members in accordance with the provisions of the Trade Union Law of the Peoples\' Republic of China. The enterprise shall appropriate a sum equal to 2% of the actual total amount of wages and salaries of workers and staff members to the trade union as outlay every month, which the trade union of the enterprise shall in accordance with the measures for the administration of trade union outlay as formulated by the All-China Federation of Trade Unions.
Chapter XII Term of Operations, Termination and Liquidation
Article 68 The term of operations of the foreign-capital enterprise shall be proposed by the foreign investor in the Application for the Establishment of the Enterprise in the light of the specific conditions of different industries and enterprises subject to the approval by the examining and approving organ.
Article 69 The term of operations of the foreign-capital enterprise shall be calculated form the day when the business license is issued.
In the event that the term of operations of the foreign-capital enterprise has to be extended upon its expiration, the enterprise shall file an application for the extension of the term of operations with the examining and approving organ 180 days before the expiration of the term of operations. The examining and approving organ shall determine whether to approve or not the extension within 30 days after receiving the application.
The foreign-capital enterprise shall go through the procedure for the change of registration with the industry and commerce administration authorities within 30 days after the date of obtaining the approval for an extension of its term of operations.
Article 70 The foreign-capital enterprise shall be terminated in one of the following circumstances：
（1）The term of operations expires；
（2）The foreign investor decides to dissolve it because of poor operation and management resulting in serious losses；
（3）Business operations cannot be carried on because of heavy losses as a result of natural disasers, wars or other force majeure；
（4）Bankrupcy；
（5）Disbanded by law due to violation of Chinese laws and regulations or jeopardizing social and public interests；
（6）Other causes for dissolution stipulated in the enterprise\'s Articles of Association have occurred.
If involved in any of the circumstances as stipulated in Item （2）, （3） and （4） of the preceding paragraph, the foreign-capital enterprise shall submit in his own discretion an application for the termination of business operations to the examining and approving organ for verification and approval. The date of approval and verification by the examining and approving organ shall be the termination date of the said enterprise.
Article 71 In case that the foreign-capital enterprise terminates its business operations in accordance with the provisions in Item （1）, （2）, （3） and （6） of Article 70 of these Rules, the enterprise shall make a public announcement and notify the creditors within 15 days after the termination date and shall come up with the procedures and principles of liquidation and the candidates for the liquidation committee to the examining and approving organ for verification and approval within 15 days from the day of the public termination announcement for liquidation before liquidation is carried out.
Article 72 The liquidation committee shall be composed of the legal representatives of the foreign-capital enterprise, the representatives of the creditors, the representatives from the competent authorities concerned together with Chinese CPA and lawyers appointed.
Priority shall be given to the payment of expenses for liquidation from the existing property of the foreign-capital enterprise.
Article 73 The liquidation committee shall execute the following functions and powers：
（1）To convene a meeting of creditors；
（2）To take over and liquidate the property of the enterprise and to prepare balance sheet and the inventory of property；
（3）To propose a basis for the valuation and calculation of the property of the enterprise；
（4）To work out a liquidation plan；
（5）To retrieve creditor\'s rights and to pay the debts；
（6）To retrieve the payments payable by shareholders which have not yet been made；
（7）To distribute the remaining property；
（8）To represent the foreign-capital enterprise in filing a lawsuit or responding to a lawsuit.
Article 74 Prior to the conclusion of the liquidation of foreign-capital enterprise, the foreign investors shall not remit or carry funds of the said enterprise out of the territory of China nor dispose of the enterprise\'s property privately.
If the net assets and remaining property exceed the registered capital upon the conclusion of the liquidation of the foreign-capital enterprise, the excess portion shall be regarded as profit on which income tax shall be imposed in accordance with the Chinese tax law.
Article 75 Upon the conclusion of the liquidation, the foreign-capital enterprise shall go through the procedures for the cancellation of registration with the industry and commerce administration authorities and hand in the business license for cancellation.
Article 76 Chinese enterprises or other economic organizations shall have the priority in purchasing the assets and properties disposed by the foreign-capital enterprise under equal conditions.
Article 77 In case that the foreign-capital enterprise terminates its business operations in accordance with the provisions in Item （4） of Article 70 of these Rules, its liquidation shall be carried out with reference to the pertinent laws and regulations of China.
A In case that the foreign-capital enterprise terminates its business operations in accordance with the provisions in Item （5） of Article 75 of these Rules, its liquidation shall be carried out with reference to the pertinent laws and regulations of China.
Chapter XIII Supplementary Provisions
Article 78 Various categories of insurance of the foreign-capital enterprise shall be insured with insurance companies within the territory of China.
Article 79 The contracts concluded by the foreign-capital enterprise with other companies, enterprises, economic organizations or individuals shall be subject to the Contract Law of the People\'s Republic of China.
Article 80 The establishment of enterprises in China mainland with the capital owned solely by the companies, enterprises, and other economic organizations or individuals in the regions of Hong Kong, Macao or Taiwan or by Chinese citizens residing in foreign countries shall be handled with reference to these Rules.
Article 81 Foreign workers and staff members and workers and staff members from Hong Kong, Macao and Taiwan working in the foreign-capital enterprise may carry into the country reasonable means of transport and articles for daily use of their own and they shall go through the import procedures in accordance with pertinent provisions of China.
Article 82 These Rules shall come into effect as of the date of promulgation.
Source：Wuqing
Release Time：2017-11-15 09:45:27
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