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Law of the People's Republic of China on Foreign-capital Enterprises
(Passed in the Fourth Session of the Sixth National People's Congress of the People's Republic of China; Firstly Amended as per Decision of Amendment of the Law of the People's Republic of China on Foreign-capital Enterprises in the Eighteenth Session of the Standing Committee of the Ninth National People's Congress of the People's Republic of China on October 31st, 2000; Secondly Amended as per Decision of Amendment of four laws like the Law of the People's Republic of China on Foreign-capital Enterprises in the Twenty-second Session of the Standing Committee of the Twelfth National People's Congress of the People's Republic of China on September 3rd, 2016)
Article 1 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 2 "Enterprises with foreign capital" as mentioned in this Law refers to those enterprises established in China with the total capital contributed exclusively by foreign investors in accordance with relevant Chinese laws, excluding branches set up in China by foreign enterprises and other foreign economic organizations.
Article 3 Enterprises with foreign capital shall be established in such a manner as to advance the development of China's national economy. The state encourages the establishment of enterprises with foreign capital involved in products export or advanced technologies.
Provisions shall be made by the State Council regarding the lines of business which the state forbids or limits enterprises with foreign capital to engage in.
Article 4 The investments of a foreign investor in China, the profits earned and other lawful rights and interests shall be protected by Chinese laws. Enterprises with foreign capital must abide by Chinese laws and regulations and shall not engage in any activities detrimental to China\'s social and public interests.
Article 5 The state shall not nationalize or requisition any enterprise with foreign capital. Enterprises with foreign capital may be requisitioned by legal procedures with appropriate compensations under special circumstances where social and public interests require.
Article 6 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 economy and trade or to another authorities authorized by the State Council. The competent authorities in charge of examination and approval shall decide whether or not to grant approval thereon within 90 days after receiving such applications.
Article 7 After an application for the establishment of an enterprise with foreign capital has been approved, the foreign investors shall apply to the industry and commerce administration authorities for registration and obtain a business licence within 30 days after receiving the certificate of approval. The date of issue of the business licence shall be the date of establishment of the enterprise.
Article 8 An enterprise with foreign capital shall acquire the status of a Chinese legal person in accordance with the law which meets the conditions for being considered as a legal person under Chinese laws.
Article 9 An enterprise with foreign capital shall make investments in China within the period approved by the authorities in charge of examination and approval, or else, the industry and commerce administration authorities are entitled to cancel the business licence of the enterprise.
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 changes, an enterprise with foreign capital shall report to the authorities in charge of examination and approval for approval and register the changes with the industry and commerce administration authorities.
Article 11 Enterprises with foreign capital shall conduct business 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, specifying matters concerning employment, dismissal, remuneration, welfare benefits,labour protection and labour insurance etc..
Article 13 Workers and staff of enterprises with foreign capital may organize trade unions in accordance with the law to conduct trade union activities and protect the lawful rights and interests of the workers and staff. The enterprises shall provide necessary conditions for the activities of the trade unions respectively.
Article 14 An enterprise with foreign capital shall set up account books, conduct independent accounting, submit the financial reports and statements as required and accept supervision by the financial and tax authorities in China.
If an enterprise with foreign capital refuses to set up account books in China, the financial and tax authorities may impose a fine thereon and the industry and commerce administration authorities may order it to suspend operations or revoke its business licence.
Article 15 Enterprises with foreign capital may purchase raw materials and fuels etc. needed within the approved business scope either from China or from the world market under the fair and reasonable principle.
Article 16 Enterprises with foreign capital shall apply to insurance companies in China for various insurance coverages.
Article 17 Enterprises with foreign capital shall pay taxes in accordance with relevant state provisions on tax payment and may enjoy preferential treatment for tax reduction or exemption.
An enterprise with foreign capital that reinvests its profits after income tax in China may apply for refund of part of the paid income tax on the reinvested amount in accordance with relevant state provisions.
Article 18 Enterprises with foreign capital shall handle with foreign exchange transactions in accordance with the provisions of state administration of foreign exchange.
Enterprises with foreign capital shall open an account with the Bank of China or with a bank designated by the state administration of foreign exchange.
Article 19 The foreign investors may remit abroad profits that are lawfully earned from an enterprise with foreign capital, other lawful income and any funds remained from the liquidation of the enterprise.
Wages, salaries and other legitimate income earned by foreign employees in an enterprise with foreign capital may be remitted abroad after the payment of personal income tax in accordance with the law.
Article 20 The foreign investor shall report the period of operations 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 decide whether or not to grant the extension within 30 days after receiving the application.
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 procedures.
Pending the completion of liquidation, a foreign investor shall 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 If the establishment of the enterprise with foreign capital doesn`t relate to special management measures for the access stipulated by the state, the items of exmination and approval prescribed in Article Six, Article Ten and Article Twenty shall be subject to filing management. The scope of special management measures for the access stipulated by the state shall be released or approved to release by the State Council.
Article 24 The department under the State Council which is in charge of foreign economy and trade shall formulate rules for implementation in accordance with this Law, which shall come into effect after being submitted to and approved by the State Council.
Article 25 This Law shall come into effect on the day of its promulgation.
Source：Wuqing
Release Time：2017-11-15 10:07:40
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