|
|
|
|
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.
Article
9 Foreign capital enterprises shall
invest in Chinese territory within the time limit
set by the examination and approval organs; the
industrial and commercial administrative organs
have the right to revoke the business license if
no investment is made within the time limit.
The industrial and commercial
administration management organs will check and
supervise the investment data of foreign capital
enterprises.
Article 10
The liquidation or merger of foreign capital
enterprises and other important changes shall be
reported to the examination and approval organs
for approval beforehand, and the enterprises shall
register any such changes with the industrial and
commercial administrative organs.
Article 11 Foreign
enterprises may carry out their business
management activities in accordance with the
approved articles of association without any
interference.
Article 12
When employing Chinese workers and staff, foreign
capital enterprises shall sign contracts with them
and specify the conditions of employment,
dismissal, remuneration, welfare, labor
protection, labor insurance and other issues in
accordance with law.
Article
13 Employees of foreign capital
enterprises may set up trade union organizations,
carry out union activities and protect their
lawful rights and interests in accordance with
law.
The foreign capital enterprises shall
provide necessary conditions for the activities of
trade unions in the enterprises.
Article 14 Foreign
capital enterprises must set up account books in
China, conduct independent accounting, submit
financial reports and statements in accordance
with regulations and accept the supervision of
financial and taxation authorities.
If a
foreign capital enterprise fails to set up an
account book in China, financial and taxation
authorities have the right to impose a fine, and
the industrial and commercial administrative
organs may order it to cease operation or even
revoke its business license.
Article 15 A foreign
capital enterprise may purchase the necessary raw
materials, fuels and other materials within the
approved business range in the domestic or
international markets, in accordance with the
principles of being fair and reasonable.
Article 16 The various
kinds of insurance coverage of foreign capital
enterprises shall be furnished by insurance organs
in China.
Article 17
Foreign capital enterprises must pay taxes and
enjoy preferential treatment such as tax reduction
or exemption in accordance with relevant
regulations.
If a foreign capital
enterprise invests its after-tax profits in China,
it may apply, according to state regulations, for
an income tax refund of a part of the income tax
already paid on the reinvestment amount.
Article 18 Foreign
exchange transactions of foreign capital
enterprises shall be governed by state regulations
on foreign exchange control.
Foreign
capital enterprises shall open accounts with the
Bank of China or other banks designated by the
State Administration of Foreign Exchange.
Article 19 The foreign
investor may remit abroad profits that are
lawfully earned and other lawful earnings and any
fund remaining after the enterprise is liquidated.
The salary and other lawful income of
foreign employees of foreign capital enterprises
may be remitted abroad after income tax is paid,
according to law.
Article
20 The business operation time limit of a
foreign capital enterprise shall be applied by the
foreign investor and approved by the examination
and approval organ. If an extension is needed when
the time limit expires, the investor may apply to
the examination and approval organs for the
extension 180 days before the expiration of the
time limit. The examination and approval organs
shall make a decision to approve or reject the
application within 30 days after receiving it.
Article 21 When
terminating its operation, a foreign capital
enterprise shall promptly issue a public notice
and proceed with liquidation, in accordance with
relevant legal procedures.
Before the
liquidation is finished, foreign investor may not
dispose of the enterprise’s assets, except for the
purpose of carrying out the liquidation.
Article 22 When a foreign
capital enterprise is to be terminated, the
enterprise shall nullify its registration with the
relevant industrial and commercial administrative
organ and surrender the business license.
Article 23 The department
of economic relations and trade of the State
Council shall draw up the rules for the
implementation of this Law, which shall come into
effect after being approved by the State Council.
Article 24 This Law shall
go into effect on the day it is promulgated. |
|
|
|
|
|
|
|
 |
|
|
|
|
|
All material on this
website is copyright and may not be republished in any form without written
permission.
© Copyright 1999 - 2005 Asia Times
Online Ltd.
|
|
Head
Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong
Kong
Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
|
|
|
|
