Law of the People's Republic of China on Foreign Capital Enterprises

(Approved by the Fourth Session of the Sixth National People's Congress on April 12, 1986, revised in accordance with the Decision to Revise the Foreign Capital Enterprises Law of the People's Republic of China made at the 18th meeting of the Standing Committee of the Ninth National People's Congress on October 31, 2000, promulgated by Order No.41 of the President of the People's Republic of China to go into effect on the day it is promulgated)

Article 1 In order to expand economic cooperation and technical exchanges with foreign countries and promote the development of China's national economy, the People's Republic of China permits foreign enterprises, other economic organizations and individuals (hereinafter referred as foreign investors) to establish foreign capital enterprises in the territory of the People's Republic of China and protects the lawful rights and interests of foreign capital enterprises.

Article 2 The foreign capital enterprises mentioned in this Law refers to enterprises established in the territory of China with all their capital exclusively invested by foreign investors in accordance with relevant Chinese laws, not including branches of foreign enterprises and other economic organizations which are located in the territory of China.

Article 3 The establishment of foreign capital enterprises must be conducive to the development of the national economy of China. China encourages the establishment of foreign capital enterprises which produce to export trade or which are equipped with advanced technology.

The industries in which the establishment of foreign capital enterprises is forbidden or restricted are to be stipulated by the State Council.

Article 4 The investment in China, the benefits obtained and other lawful rights and interests of foreign investors are protected by Chinese laws.

Foreign capital enterprises must obey the laws and regulations of China, and shall not harm the social and public interests of China.

Article 5 The state shall not implement nationalization or requisition of foreign capital enterprises. Under special circumstances, when public interest requires, enterprises with foreign capital may be requisitioned by legal procedures and appropriate compensation shall be made.

Article 6 The application for establishing a foreign capital enterprise shall be approved by the department under the State Council in charge of foreign economic relations and trade, or by other agencies authorized by the State Council. The examination and approval organ shall make a decision to approve or reject the application within 90 days after receiving it.

Article 7 After the application for establishing a foreign capital enterprise is approved, the foreign investor(s) shall apply for registration and receive the business license with the industrial and commercial administrative organ within 30 days after receiving the approval certificate. The date on which the business license is issued is the date the enterprise is established.

Article 8 Foreign capital enterprises which accord with the regulations of Chinese laws on the qualification of legal persons shall acquire the status of Chinese legal persons.

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