Article 1 In order to expand foreign economic co-operation and technological exchange and to promote the development of the Chinese national economy, the People's Republic of China permits foreign enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) to establish enterprises with sole foreign investment within Chinese territory, and protects the legitimate rights and interests of such enterprises. Article 2 Enterprises with sole foreign investment as referred to in this taw are those enterprises established within Chinese territory, in accordance with the relevant Chinese laws. With their capital provided totally by a foreign investor. It does not include branches in China of foreign enterprises or other economic organizations.
Article 3 Enterprises established exclusively with foreign capital must benefit the development of the Chinese national economy. The State encourages the establishment of export-oriented foreign investment enterprises and foreign investment enterprises with advanced technology. Lines of business in which the establishment of enterprises with sole foreign investment is prohibited or restricted shall be stipulated by the State Council.
Article 4 The investments, profits and other legitimate rights and interests of foreign investors in China are protected by Chinese law.
Enterprises with sole foreign investment must observe Chinese laws and regulations, and shall not harm the social order or public interest of China .
Article 5 The State will not nationalize or expropriate enterprises with sole foreign investment but in special circumstances, where it is necessary to the public interest, an enterprise with sole foreign investment may be expropriated in accordance with legal procedures and the appropriate compensation paid.
Article 6 Applications for the establishment of enterprises with sole foreign investment shall be submitted for examination and approval by the State Council department in charge of foreign economic relations and trade or a body authorized by the State Council. The examining and approving body shall, within 90 days of receipt of the application make a decision whether or not to approve the application.
Article 7 Following approval of an application for the establishment of an enterprise with sole foreign investment, the foreign investor shall, within 30 days of receipt of the approval certificate, apply for registration with the industrial and commercial administrative authorities and obtain a business license The date of issue of the business license of an enterprise with sole foreign investment is the date of establishment of the said enterprise.
Article 8 An enterprise with sole foreign investment, which conforms to the conditions for becoming a legal person under the relevant Chinese law, shall acquire such status in accordance with the law.
Article 9 An enterprise with sole foreign investment shall invest in China within the time limit approved by the examining and approving body. Should it fail to invest within the required time the industrial and commercial administrative authorities shall have the right to revoke its business license.
The industrial and commercial administrative authorities shall cam out inspection and supervision of the investment status of enterprises with sole foreign investment.
Article 10 In the event of division merger or other major changes, an enterprise with sole foreign investment shall report to. and seek approval from, the examining and approving body and carry out procedures for registration of such changes with the industrial and commercial administrative authorities. |
