Article 1 For the purposes of promoting foreign investors to invest in China , importing advanced foreign technology and management experience, foreign investors are allowed to establish investment companies in China in accordance with related Chinese laws. regulations and the said Rules about foreign investment.
Article 2 The investment company referred to in the said Rules means the company who is engaged in direct investment established in China by foreign investors or joint venture of foreign and Chinese investors. The company is a limited liability company.
Article 3 Applying for establishing an investment company should qualify following requirements:
I. (1) The foreign investor should have fine credit and economic strength that is necessary for establishing an investment company. The total sum of the investor's property in the year before its application should not be less than 400 million USD and the investor should have established foreign invested enterprise in the territory of China and have paid its invested sum of registered capital more than 10 million USD. or.
(2) Foreign investor has fine credit and economic strength that is necessary for establishing an investment company. The investor has established more than ten foreign invested enterprises and the invested sum of its registered capital that is actually paid should be more than 30 million USD:
2. As for establishing investment companies by joint venture, Chinese investor should have fine credit and economic strength that is necessary for establishing an investment company and the total sum of its property in the year before it makes an application should not be less than 100 million RMB;
3. The registered capital of the investment company should not be less than 30 million USD.
The foreign investor who applies for establishing an Investment company should be a foreign company, enterprise or economic organization. If there are more than two foreign investors, at least one of them who holds big stock ownership meets the provisions of the said Article, Section 1, Item (1).
Article 4 The foreign investor who meets the requirements of Article 3, Section 1, Item (1) may invest in investment company by the name of its wholly-owned subsidiary.
Article 5 If the foreign investor who applies for establishing an investment company meets the requirements of Article 3, Section 1, Item ( I ) , it should write a guarantee to the approval administration, assuring the investment company to pay the registered capital when it invests in China and provide transfer technology that belongs to the investor or affiliated company.
If the parent company establishes investment company in the name of its wholly - owned subsidiary, the parent company must provide the letter of guarantee to the examination and approval authority, guaranteeing its subsidiary to pay the registered capital for the established investment companies in accordance with requirement of the examination and approval authority, and assuring to pay registered capital and transfer technology that belongs to the parent company and its subsidiary while making the investment in the territory of China.
Article 6 Apply for establishing an investment company, the investor should submit following documents to the Ministry of Commerce after the examination and approval of the competent commercial department of local province, autonomous region, municipality directly under the Central Government and city specifically designated in the state plan.
1. The application report, contract, rules signed by all parties of joint venture investment companies;
The application form of foreign invested enterprises, feasibility research report and rules signed by foreign investors of exclusive ownership investment company;
2. The certificate of credit, registration for the record (copy) and legal representative of the investors (copy);
3. The approval certificate (copy), business license (copy) of foreign investor Invested enterprises and capital verification report issued by Chinese registered accountant;
4. Statement of asserts and liabilities of the investors in recent 3 years audited in accordance with laws;
5. The letter of guarantee that should be submitted in accordance with Article 5;
6. Other papers required by the Ministry of Commerce.Above papers should be formal ones except those that are made clear indication of "copy".
If the representative who signed the document is not the legal representative, the legal representative's authorization letter should be provided.
If any one trusts the intermediary established in accordance with the law to go through the application formalities, the authorization letter signed by investor's legal representative should be provided.
Article 7 The foreign investor should use currency that may be exchanged freely or the interests of RMB they obtained in the territory of China or the legal income from stock transfer and account clearing as its registered capital provided to the investment company. Chinese investor may invest by RMB. If the foreign investor uses its legal income of RMB as registered capital to its investment company, it should submit relevant certificate and tax evidences. It should pay all funds in two years as of the issuing of its business license.
Article 8 There should be at least 30 million USD among the registered capital of the investment company as the funds provided to its newly invested foreign-invested enterprise, or as the funds that it has not paid to the foreign-invested enterprises invested by parent company or affiliated company (have gone through the formalities of stock transfer) or the fund provided as capital increase, or the investment for establishing research and development center, or for buying stock ownership of the shareholder in the territory of China (exclude the stock ownership from the investment that investment parent company or its affiliate have already paid).
Article 9 The registered capital of investment company should not be less than 30 million USD and its loan must not exceed 4 times of the registered capital that it has been paid. The registered capital of the investment company should not be less than 100 million USD and its loan must not exceed 6 times of the registered capital that it has been paid. If the loan of the investment company exceeds above described sum to meet the needs of their business, it should report to the Ministry of Commerce for approval.
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