Table of Contents
Chapter I: General Provisions
Article 1 This Law is enacted for the purposes of further expanding opening-up, actively promoting foreign investment, protecting the lawful rights and interests of foreign investors, regulating the administration of foreign investment, promoting the formation of a new pattern of comprehensive opening-up, and facilitating the sound development of the socialist market economy.
Article 2 This Law shall apply to foreign investment within the territory of the People’s Republic of China. For the purposes of this Law, “foreign investment” means investment activities directly or indirectly conducted by foreign natural persons, enterprises, or other organizations (hereinafter referred to as “foreign investors”) within the territory of China, including the following circumstances: (1) A foreign investor establishes a foreign-invested enterprise within the territory of China, either independently or jointly with any other investor; (2) A foreign investor acquires shares, equity interests, property shares, or any other similar rights and interests of an enterprise within the territory of China; (3) A foreign investor makes investment in a new project within the territory of China, either independently or jointly with any other investor; (4) A foreign investor makes investment in any other manner as prescribed by laws, administrative regulations, or the State Council.
Article 3 The state shall adhere to the basic state policy of opening-up and shall encourage foreign investors to make investment in accordance with law within the territory of China. The state shall implement the management systems of pre-establishment national treatment and a negative list for foreign investment.
Article 4 The state shall grant national treatment to foreign investment and the investment of foreign investors in fields not covered by the negative list for foreign investment access. The negative list for foreign investment access shall be issued by or with the approval of the State Council. Where international treaties or agreements concluded or acceded to by the People’s Republic of China provide for more favorable treatment for foreign investors, the provisions of such treaties or agreements may prevail.
Article 5 The state shall protect the investment, earnings, and other lawful rights and interests of foreign investors within the territory of China in accordance with law.
Article 6 Foreign investors and foreign-invested enterprises conducting investment activities within the territory of China shall comply with Chinese laws and regulations and shall not endanger China’s national security or harm the public interest.
Article 7 The competent departments for commerce and investment under the State Council shall, in accordance with the division of duties, carry out the work of promoting, protecting, and administering foreign investment. Other relevant departments under the State Council shall, within the scope of their respective duties, be responsible for the work relating to the promotion, protection, and administration 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 duties determined by the governments at the same level, carry out the work of promoting, protecting, and administering foreign investment.
Article 8 Foreign-invested enterprises shall accept the supervision conducted by the relevant government departments in accordance with law.
Article 9 The state shall establish a comprehensive foreign investment service system to provide foreign investors and foreign-invested enterprises with services such as legal consultation, policy guidance, and information services regarding laws and regulations, policies and measures, and investment project information.
Chapter II: Investment Promotion
Article 10 The state shall ensure that foreign-invested enterprises participate in the formulation of standards on an equal basis in accordance with law, and shall strengthen the transparency of information and the supervision of the formulation of standards. Mandatory standards formulated by the state shall apply equally to foreign-invested enterprises and domestic enterprises.
Article 11 The state shall ensure that foreign-invested enterprises participate in government procurement activities on a fair and competitive basis in accordance with law. Products produced and services provided by foreign-invested enterprises within the territory of China shall be treated equally in government procurement in accordance with law.
Article 12 Foreign-invested enterprises may conduct financing through methods such as public offering of stocks, corporate bonds, and other securities in accordance with law.
Article 13 The state shall, as needed, establish special economic zones or implement pilot policies for foreign investment in certain regions, providing greater convenience and preferential treatment to foreign investors.
Article 14 The state shall, in accordance with the needs of national economic and social development, encourage and guide foreign investors to make investment in specific industries, fields, and regions. Foreign investors and foreign-invested enterprises may enjoy preferential treatment in accordance with laws, administrative regulations, or the provisions of the State Council.
Article 15 The state shall ensure that foreign-invested enterprises are treated equally with respect to tax policies and fee reduction policies in accordance with law.
Article 16 Local people’s governments at all levels may, within the scope of their statutory authority, formulate policies and measures for promoting and facilitating foreign investment based on local actual conditions.
Article 17 Foreign investors may, in accordance with law, establish foreign-invested enterprises within the territory of China, or jointly establish enterprises with Chinese investors. The state shall not impose any performance requirements on foreign investment unless otherwise provided by laws and administrative regulations.
Article 18 The relevant departments of the local people’s governments at or above the county level shall simplify the procedures for foreign investment and improve service efficiency. Where foreign investment matters require administrative licensing, the relevant authorities shall process them in accordance with the law and regulations on simplifying administrative procedures.
Article 19 People’s governments at all levels and their relevant departments shall, in accordance with the principles of convenience, efficiency, and transparency, further streamline the procedures, improve service efficiency, and optimize government services for foreign-invested enterprises, and handle matters such as administrative licensing in a timely manner.
Chapter III: Investment Protection
Article 20 The state shall not expropriate the investment of any foreign investor. Under special circumstances, the state may expropriate or requisition the investment of a foreign investor in the public interest in accordance with the procedures prescribed by law and shall provide fair and reasonable compensation.
Article 21 Foreign investors may, in accordance with law, freely remit their contributions, profits, capital gains, income from asset disposal, royalties derived from intellectual property rights, lawfully obtained compensation or indemnity, income from liquidation, and other funds both into and out of China within the territory of China in RMB or a foreign currency. No entity or individual may illegally restrict the currency, amount, or frequency of such remittances.
Article 22 The state shall protect the intellectual property rights of foreign investors and foreign-invested enterprises and the lawful rights and interests of holders of intellectual property rights. Administrative authorities and their staff members shall keep confidential the trade secrets of foreign investors and foreign-invested enterprises that they become aware of in the course of performing their duties and shall not divulge or illegally provide them to others. The state shall encourage technical cooperation based on voluntary principles and commercial rules in the process of foreign investment. Conditions for technical cooperation shall be determined by all parties to the investment through negotiation on an equal basis. No administrative authority or its staff member may force the transfer of any technology by administrative means.
Article 23 The state shall protect the lawful rights and interests of foreign-invested enterprises in participating in government procurement on an equal footing. No entity or individual may discriminate against foreign-invested enterprises.
Article 24 Where normative documents are formulated by administrative authorities involving the rights and obligations of foreign-invested enterprises, such documents shall comply with the provisions of laws and regulations. Normative documents without a basis in laws, administrative regulations, or State Council decisions and orders, or normative documents that impair the lawful rights and interests of foreign-invested enterprises or impose additional obligations on foreign-invested enterprises shall have no binding force and shall be set aside or amended in accordance with law.
Article 25 Local people’s governments at all levels and their relevant departments shall keep their policy commitments made to foreign investors and foreign-invested enterprises within the scope of their statutory authority and fulfill all types of contracts concluded in accordance with law. Where policy commitments or contractual provisions need to be altered in the public interest, such alteration shall be made in accordance with the statutory authority and procedures, and foreign investors and foreign-invested enterprises shall be compensated in accordance with law for the losses they suffer as a result.
Article 26 The state shall establish a complaint mechanism for foreign-invested enterprises, to promptly handle complaints filed by foreign-invested enterprises or their investors and coordinate the improvement of relevant policies and measures. Where a foreign-invested enterprise or its investor considers that an administrative act of an administrative authority or its staff member infringes upon its lawful rights and interests, it may, in addition to seeking resolution through the complaint mechanism for foreign-invested enterprises, apply for administrative reconsideration or institute an administrative lawsuit in accordance with law.
Article 27 Foreign-invested enterprises may establish and voluntarily participate in chambers of commerce or associations in accordance with law. Chambers of commerce and associations shall carry out activities in accordance with laws, regulations, and their articles of association, safeguard the lawful rights and interests of their members, and reflect the reasonable demands of their members.
Chapter IV: Investment Administration
Article 28 Foreign investors shall not invest in any field prohibited by the negative list for foreign investment access. For any field restricted by the negative list, foreign investors shall meet the investment conditions prescribed by the negative list. For any field not covered by the negative list for foreign investment access, foreign investment shall be administered under the principle of equal treatment for domestic and foreign investment.
Article 29 Where foreign investment requires the verification and filing of an investment project, such verification and filing shall be carried out in accordance with the relevant state provisions.
Article 30 Where a foreign investor invests in an industry or field where a license is required by law, it shall obtain the relevant license in accordance with law. The relevant competent department shall, in accordance with the conditions, procedures, and time limits equal to those applicable to domestic investment, examine the application for a license filed by the foreign investor, unless otherwise provided by laws and administrative regulations.
Article 31 The organizational form, organizational structure, and rules of procedure of a foreign-invested enterprise shall be governed by the Company Law of the People’s Republic of China, the Partnership Enterprise Law of the People’s Republic of China, and other applicable laws.
Article 32 In conducting production and business operation activities, foreign-invested enterprises shall comply with the provisions of laws, administrative regulations, and rules on labor protection and social insurance, and shall handle matters relating to taxation, accounting, foreign exchange, and other matters in accordance with laws, administrative regulations, and relevant state provisions, and shall accept the supervision and inspection conducted by the relevant government departments in accordance with law.
Article 33 Foreign investors acquiring companies within the territory of China or participating in the concentration of undertakings by other means shall be subject to a security review in accordance with law where such acquisition or concentration may affect national security. The security review decision made in accordance with law shall be final.
Article 34 The state shall establish a foreign investment information reporting system. Foreign investors and foreign-invested enterprises shall submit investment information to the competent department for commerce through the enterprise registration system and the enterprise credit information publicity system in accordance with the provisions of the State Council. The content and scope of foreign investment information reporting shall be necessary; where investment information that can be shared among departments, it shall be acquired through interdepartmental information sharing.
Article 35 The state shall establish a credit system for foreign investment, recording the credit information of foreign investors and foreign-invested enterprises, publicizing such information to the public in accordance with law, and imposing disciplinary measures for untrustworthiness in accordance with law.
Chapter V: Legal Liability
Article 36 Where a foreign investor invests in a field prohibited by the negative list for foreign investment access, the relevant competent department shall order it to cease the investment activity, dispose of its shares and assets, or take other necessary measures within a prescribed time limit, and restore the situation to the state before the investment; any illegal gains shall be confiscated. Where the investment of a foreign investor violates any special administrative measure for foreign investment access prescribed in the negative list for foreign investment access, the relevant competent department shall handle it in accordance with the provisions of the preceding paragraph, unless otherwise provided by laws and administrative regulations.
Article 37 Where a foreign investor or foreign-invested enterprise violates the provisions of this Law by failing to submit investment information as required, the competent department for commerce shall order it to make corrections within a prescribed time limit; where it fails to do so within the prescribed time limit, a fine of not less than RMB 100,000 and not more than RMB 500,000 shall be imposed.
Article 38 Where laws and administrative regulations provide otherwise for legal liability for illegal acts relating to foreign investment, such provisions shall prevail.
Article 39 Where a staff member of an administrative authority engaged in foreign investment administration abuses power, neglects duty, or engages in malpractice for personal gain, or divulges or illegally provides to others trade secrets of foreign investors or foreign-invested enterprises that he or she has become aware of in the course of performing duties, a sanction shall be imposed in accordance with law; where a crime is constituted, criminal liability shall be pursued in accordance with law.
Chapter VI: Supplementary Provisions
Article 40 The investment by natural persons, enterprises, or other organizations from the Hong Kong Special Administrative Region and the Macao Special Administrative Region within the territory of the mainland shall be governed by the provisions of this Law with reference thereto, unless otherwise provided by laws, administrative regulations, or the State Council.
Article 41 The investment by natural persons, enterprises, or other organizations from the Taiwan region within the territory of the mainland shall be governed by the Law of the People’s Republic of China on the Protection of Investment by Taiwan Compatriots; where that Law is silent, the provisions of this Law shall apply with reference thereto.
Article 42 This Law shall come into force on January 1, 2020. The Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises, and the Law of the People’s Republic of China on Sino-Foreign Cooperative Joint Ventures shall be repealed simultaneously.
Translation note: This is an unofficial English translation for reference purposes. The original Chinese text shall prevail in all legal matters.
