Foreign Investment Law of the People’s Republic of China
Chapter I General Provisions
Article 1
In order to further expand opening up, actively promote foreign investment, protect the legitimate rights and interests of foreign investment, standardize foreign investment management, facilitate the formation of a comprehensive and new opening-up pattern, and promote the healthy development of the socialist market economy, this Law is enacted in accordance with the Constitution.
Article 2
This Law applies to foreign investment in the territory of the People’s Republic of China (hereinafter referred to as “within the territory of China”).
Foreign investment mentioned in this Law refers to the investment activities of foreign natural persons, enterprises or other organizations (hereinafter referred to as foreign investors) directly or indirectly within the territory of China, including the following:
(1) Foreign investors set up foreign-invested enterprises in China alone or jointly with other investors;
(2) Foreign investors obtain shares, equities, property shares or other similar rights and interests of enterprises within the territory of China;
(3) Foreign investors investing in new projects in China alone or jointly with other investors;
(4) Other investment prescribed by laws, administrative regulations or specified by the State Council.
Foreign-invested enterprises mentioned in this Law refer to enterprises that are wholly or partly invested by foreign investors and registered within the territory of China under the Chinese laws.
Article 3
The State adheres to the basic State policy of opening to the outside world and encouraging foreign investors to invest within the territory of China.
The State maintains a policy of high-level investment liberalization and facilitation, establishes and improves a mechanism for foreign investment promotion, and creates a stable, transparent, predictable and fair market environment.
Article 4
The State maintains a system of pre-entry national treatment plus a negative list management for foreign investment.
The pre-entry national treatment mentioned in the preceding paragraph refers to the treatment given to foreign investors and their investment at the stage of investment admission no less than that to domestic investors and their investments; the so-called negative list refers to the special management measures that are adopted for the admission of foreign investment in specific areas. The State gives national treatment to foreign investment outside the negative list.
The negative list is issued or approved by the State Council.
Where international treaties or agreements concluded or acceded to by the People’s Republic of China provide for more preferential treatments for the admission of foreign investment, the relevant provisions may be applied.
Article 5
The State protects the investment, income and other legitimate rights and interests of foreign investors in China in accordance with the law.
Article 6
Foreign investors and foreign-invested enterprises that conduct investment activities within China shall abide by Chinese laws and regulations and shall not endanger China’s national security and harm the public interest.
Article 7
The competent departments ofthe State Council responsible for commerce and investment shall, in accordance with the division of responsibilities, carry out the promotion, protection and management of foreign investment; other relevant departments of the State Council shall, within their respective responsibilities, be responsible for the affairs related to the promotion, protection and management of foreign investment.
The relevant departments of the local people’s governments at or above the county level shall, in accordance with laws and regulations and the division of responsibilities determined by the people’s government at the same level, carry out the work relating to the promotion, protection and management of foreign investment.
Article 8
Employees of foreign-invested enterprises may, in accordance with law, establish trade union organizations, carry out trade union activities, and safeguard their legitimate rights and interests. Foreign-invested enterprises shall provide necessary conditions for the trade unions thereof.