Laws & Regulations

Adopted at the Fourth Session of the Sixth National People's Congress on April 12, 1986

Amended according to the Decision on Revision of the Law of the People's Republic of China on Foreign-Capital Enterprises adopted at the 18th Meeting of the Standing Committee of the Ninth National People's Congress on October 31, 2000

Article 1 With a view to expanding economic cooperation and technological 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 As mentioned in this Law, "enterprises with foreign capital" refers to those enterprises established in China by foreign investors, exclusively with their own capital, in accordance with relevant Chinese laws. The term does not include 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 help the development of China's national economy. The State may encourage the establishment of foreign-capital enterprises that are export-oriented or technologically advanced.

Regulations shall be formulated by the State Council regarding the lines of business which the State forbids enterprises with foreign capital to engage in or on which it places certain restrictions.
Article 4 The investments of a foreign investor in China, the profits it earns and its other lawful rights and interests are protected by Chinese law.

Enterprises with foreign capital shall abide by Chinese laws and regulations and may not engage in any activities detrimental to China's public interests.

Article 5 The State does not nationalize or requisition any enterprise with foreign capital. However, under special circumstances when public interests require, enterprises with foreign capital may be requisitioned through legal procedures and appropriate compensation shall be made.

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