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Basic Policies For Foreign-funded Enterprises
Aug 17, 2016

April 12, 1986, published by the People's Republic of China Law on foreign-funded enterprises, establish wholly foreign-owned enterprises in China's basic policies and principles are:


1. In order to expand foreign economic cooperation and technological exchanges, promote the development of China's national economy, China allowed foreign enterprises and other economic organizations or individuals to establish foreign-funded enterprises in China, protect the legitimate rights and interests of foreign-funded enterprises.


2. The establishment of foreign-funded enterprises must be conducive to China's economic development and use of advanced technology and equipment, or export or export all of their products. Establishment of foreign-funded enterprises is prohibited or restricted in certain industries in China. Prohibitions or restrictions on foreign-funded enterprises, including military-industrial, business and cultural enterprises.


3. Foreign investors in China's investment, profits and other legitimate rights and interests protected by the Chinese laws. Foreign companies must abide by Chinese laws, the rule of law, and must not harm the social and public interests of China. Provided for in the law on foreign-funded enterprises, foreign-funded enterprises in China are not nationalization and expropriation, in special cases, when public interest requires, when imposed on foreign-funded enterprises in accordance with legal procedures, and pay appropriate compensation.


4. The application for the establishment of foreign-funded enterprises, foreign economic relations and trade under the State Council examined and approved by competent authorities or authorized agencies of the State Council. Foreign-funded enterprises shall be approved by the examination and approval authorities within the period of investments in China; if no investment, industrial and commercial administrative organs have the right to revoke its business license. On the investment of foreign-funded enterprises, inspection and supervision by the Administration for industry and commerce.


5. Foreign-funded enterprises production business plan, shall be submitted to its competent authorities for the record.


6. Foreign-funded enterprises in China must set up account books, accounting and submit financial reports as stipulated, and accept supervision by the financial and tax authorities. Refuse to set up accounting books in China, the financial and tax authorities can impose a fine, administrative organs of industry and commerce can be ordered to stop operating, or revoke its business license.


7. Foreign-funded enterprises in accordance with the People's Republic of China foreign enterprise income tax law and relevant tax regulations tax may apply for tax breaks, tax exemptions and preferential treatment. Reinvestment of profit after income tax in China, you can apply for a refund of the reinvestment part paid for part of the income tax.



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