China investment guide aims at providing potential investors with an outline of the basic information for setting up a commercial presence in China and conducting business there. When it comes to the newest and the most popular ways to invest money for gain, more than a few investors around the world are looking at China. To grasp the opportunity to invest in China, it is necessary to know the relevant policies, methods, favorable items, etc.
Laws and regulations for foreign investment in China
In order to create a favorable investment environment and encourage foreign investment, the Chinese government has made great efforts to improve the legislation on foreign investment since it adopted a policy of reform and opening up in 1978. In 1979, the National People's Congress issued The Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures. In the following 30-odd years, the Chinese government has promulgated and issued a series of laws and statutes concerning the establishment, operation, termination and liquidation of foreign-invested enterprises.
The Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (Revised 2009);
The Provisions on the Establishment of Investment Companies by Foreign Investors (Revised 2004);
The Foreign Trade Law of the People's Republic of China (2004);
The Regulations on the Foreign Exchange System of the People's Republic of China (2008);
The Law of the People's Republic of China on Wholly Foreign-Owned Enterprises (Revised 2000) and its implementation rules (2001).
Note: For more details, please visit the Database of Laws and Regulations of the National People's Congress of China, the website of the Legislative Affairs Office of the State Council and the website of the Ministry of Commerce.
China foreign investment encouraged Items
To direct foreign investment to go along with the development scenario of Chinese industries, and to avoid blind investment, the Chinese government promulgated in June 1995 the Interim Provisions for Guiding Foreign Investment and the Industrial Catalog for Foreign Investment.
The items in the catalog encouraged for foreign investment mainly include: new agriculture technologies, comprehensive development of agriculture, energy resources, communications, important raw materials, new and high technologies, export-oriented and foreign-currency-earning projects, comprehensive utilization and regeneration of resources, prevention of environmental pollution, and those that give play to the advantages of China's mid-west areas.
Forms of foreign investment in China
The most important decision to be made by investors in China is the choice of the most suitable investment vehicle. Typically, the most popular forms of foreign investment in China are:
1. The Wholly Foreign-Owned Enterprise - a company fully established by foreign capital.
2. Joint Ventures divided into Equity Joint Ventures (EJVs) and Cooperative Joint 3. Ventures (CJVs). Joint ventures are formed on the basis of foreign and Chinese joint investments.
3. The Representative Office.
Foreign investors can also opt for more specific forms of investment such as:
1. Build-Operate-Transfer.
2. Compensation Trade.
3. Processing & Assembly.
4. International Leasing.
Contact Us
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