Investment Laws & Regulations

Direction For Foreign

Restricted Projects

1. Those which have been developed in our country or have introduced technology from abroad and of which the production capacity can meet the demands of the domestic market;
2. The industries under experiment by the state to absorb foreign investment;
3. Mining and ore-dressing industry of mineral resources;
4. Other restricted projects specified by the national laws and regulations.

Encouraged Projects

1. Exploitation of mountain forest, aquatic or shoal resources; development of farming and forest planting, aquatic, livestock and poultry raising and their processing industry;
2. Production of new equipment and materials which suit the demands of domestic and foreign markets and cannot be produced in our country for the time being;
3. Those which suit the demands of domestic and foreign markets and raise the grade of products, so as to increase the foreign currency earning from export of commodity by opening up new market and promoting export sales;
4. Those which can improve the performance of product, reduce consumption, increase productivity, improve the technical and economic benefits, are urgently needed in our country and technically advanced;
5. Construction of energy resources, transportation and urban infrastructure;
6. Building of commercial residential houses, reconstruction of old cities, development and construction of new urban districts on tracts of land;
7. Development and construction of tourist scenic spots;
8. Other incentive projects specified by national laws and regulations.

Prohibited Projects

1. Those which are disadvantageous to the national security or detrimental to the national economy, social development and public welfare;
2. Those which destroy the natural resources and pollute the environment beyond the standard stipulated by the state;
3. Posts and telecommunications;
4. Broadcasting, television and news coverage;
5. Production of military supplies.

Procedures for Establishing Foreign-Invested Enterprises

1. Joint Venture Cooperation
1. Both parties sign a letter of intent to carry out a joint venture
2. The Chinese side submits a project proposal to the relevant authorities for approval
3. Both parties prepare and sign a feasibility study report to be presented to Chinese authorities for approval
4. Both parties prepare and sign a contract to be presented to Chinese authorities for approval
2. Foreign-invested Enterprises
Submit reports to the local people's government above county level in which the enterprise is to be located and provide the following documents:
1. "Application form for the establishment of a foreign investment enterprise in P.R. China"
2. Feasibility study Report
3. Company Constitution
4. A list of represantatives of legal persons or board of directors
5. provide documents relating to the foreign investor's legal status, and financial, credit situation
6. The related departments in the local government where the enterprise is to be located.
7. A list of materials needed to be imported.

Guarantee of Investment

The ligitimate rights and benefits of a foreign-invested enterprise, including the property ownership right and disposal of the foreign investors and their right to dispose of their ligitimate income shall be protected by the Chinese laws.

1. The government guarantees according to law the autonomy of enterprises in management, and supports them to manage their enterprises according to the international customary practice. The foreign-invested enterprises, by themselves, have the right to determine, within the scope of their approved contracts,on their production and business plans, and to raise and use the funds, to purchase the materials and sell their products.
2. The foreign-invested enterprise, based on their production and operation requirement, can on their own determine the structure and size of their staff, employ or dismiss administrative personnel at all levels, increase or dismiss staff an workers, recruit publicly the required personnel within the Nangjing Municipality scope and also can recruit or borrow personnel outside the municipality after getting consent from the Nanjing Labour Bureau and Nanjing Personnel Bureau. They can determine by themselves the wage-levels, wage forms as well as bonus and allowance system.
3. The net profits distributed to the foreign investors in the foreign -invested enterprises after having fulfilled their obligations stipulated in the law, and the contract, the share of capital or other funds upon termination or expiry of the joint venture, the after -tax salaries and other legitimate earnings of the foreign personnel in the enterprises can all be remitted abroad.
4. The foreign-invested enterprise can insure with Nanjing Branch of the People's insurance Company of China or other approved organizations.
5. The proprietary technology approved in China and provided for the foreign-invested enterprise in Nanjing by the foreign investors and registered trademark are both protected by China Patent Law and Trade-mark Law. When the right is being infringed, the injured party can ask the patent authority or the Administration Bureau for Industry and Commerce to handle the case, or bring the suit directly to the court.
6. The disputes, that arise between the parties in joint venture or cooperative venture during the implementation of the contract(agreement), and can not be settled through consultation or negotiation, may be settled through arbitration according to the relevant written arbitration agreement. If there is no written arbitration agreement between two parties, either party can use the people's court for settlement.
7. The state will not nationalize or expropriate the foreign-invested enterprises. Under extraordinary circumstances, when it is deemed necessary in public interests, the requisition would be carried out through legal procedures and reasonable compensation will be given accordingly.
8. The government especially encourages foreign investors to set up export-oriented or technologically-advanced enterprises and will give them, then, the preferential treatment with respect to taxation, credit , supply of water,electricity and gas, and telecommunication and transportation facilities.
9. The foreign-invested enterprises may appeal to relevant government departments to solve their difficulties in the process of their investment, construction, production, management or liquidation.
10. The rights and interests of foreign investors in China are also protected by bilateral agreements between Chinese government and the government of the investor's country, such as agreement on investment insurance or investment protection, and agreement on avoiding double taxation.

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