Implementation Regulations for the Foreign Investment Law

Source:http://www.moj.gov.cn/news/content/2019-11/01/zlk_3235065.html
提交意见时限：12月01日

Chapter I: General Provisions

Article 1: These Regulations are drafted so as to ensure the effective implementation of the "Foreign Investment Law of the P.R.C." (Hereinafter simply the Foreign Investment Law).

Article 2: The state is to improve relevant policy measures, continuously strengthen the strength of opening to the world, optimize the environment for foreign investment, and encourage and actively promote foreign investors lawful investment in China.

Article 3: Foreign investors may invest in China either independently or jointly with other investors including natural persons from China.

Article 4: "invest in new projects in mainland China" as used in Article 2, paragraph 2, item (3) of the Foreign Investment Law, refers to foreign investors making investments in the establishment of specified projects in mainland China, but not setting up foreign-invested enterprises, and not obtaining shares, stock rights, property shares or other such types of benefits in mainland Chinese enterprises.

Article 5: The State Council Department for Market Oversight and Management, or other authorized local government departments for market oversight and management, are responsible for handling the registration of foreign-invested enterprises.

Article 6: The State Council departments in charge of investment, together with the State Council departments in charge of commerce and other relevant departments, are to report the Negative List for Foreign Investment Market Access to be published by the State Council, or to be approved and published by the State Council.

As needed for further expanding openness to the world, the state is to adjust the Negative List for Foreign Investment Market Access at appropriate times. The procedures for adjusting the Negative List for Foreign Investment Market Access are to apply the provisions of the preceding paragraph.

Article 7: The state is to follow relevant laws and regulations as well as international treaties and agreements that it has concluded or participates in, to protect the investments, earnings, and lawful rights and interests of foreign investors in mainland China.

Article 8: The State Council departments in charge of commerce and investment, as well as other relevant departments, shall follow their duties and divide labor, cooperating closely and mutually collaborating to jointly complete efforts to promote, protect, and manage foreign investment.

Local people's governments at the county level or above shall strengthen organization and leadership of efforts on the promotion, protection, and management of foreign investment; supporting and urging relevant departments to follow laws and regulations, and their duties and division of labor, to carry out efforts on the promotion, protection, and management of foreign investment, and promptly adjust and resolve major problems in the efforts to promote, protect, and manage foreign investment.

Chapter II: Investment Promotion

Article 9: Governments and their relevant departments that are formulating or implementing policy measures in support of enterprise development in areas such as funding arrangements, land supply, tax relief, qualifications and permits, project declarations, title evaluation, human resources, and so forth, shall treat all types of enterprises equally in accordance with law, including foreign-invested enterprises, and must not draft or implement discriminatory policy measures.

Policy measures in support of enterprise development shall be publicly disclosed in accordance with law. Where the implementation of policy measures involves matters for which enterprises must apply for handling, governments and their relevant departments shall disclose the matters such as the process and requirements for applications, and shall fairly and justly review them.

Article 10: Governments and their relevant departments that are drafting laws, regulations, rules, and normative documents related to foreign investment shall, based on the actual conditions, employ methods such as soliciting opinions, convening symposiums and hearings, to hear the comments of foreign-invested enterprises, foreign chambers of commerce, and other parties; and shall use appropriate methods to give feedback on the acceptance of comments that are more concentrated or involve issues of foreign-invested enterprises major interests.

Normative documents related to foreign investment shall be promptly published in accordance with law through means such as government bulletin, government websites, and so forth; and where they have not been published, they must not be a basis for management of foreign investment.

Article 11: All levels of people's government shall follow the principle of government direction with participation from may sides, to establish and complete a foreign investment service system, increasing the level of services for foreign investment.

Governments and their relevant departments shall go through the uniform online government service platform to concentrate publication of laws, regulations, rules, and normative documents, policy measures, investment program information, and so forth related to foreign investment, and use multile channels and methods to strengthen publicity and explanation, providing foreign-invested enterprises with information, guidance, and other such services.

Article 12: Special economic regions" as used in Foreign Investment Law article 13 refers to specified regions providing more open policy measures for foreign investment that are established by state approval to promote foreign investment and expand openness to the world.

The state is to implement experimental policy measures for foreign investment in some regions, and where the experiments demonstrate readiness, expand the scope to other regions or to the entire nation, in light of actual conditions.

Article 13: Based on the needs of national economic and social development, the State is to draft a catalog of industries in which foreign investment is encouraged, encouraging and guiding foreign investors and foreign-invested enterprises, to invest in certain industries, fields, or regions. The State Council departments in charge of investment, together with the State Council deparments in charge of commerce and other relevant departments, as well as relevant local people's governments, are to draft the catalog of industries in which foreign investment is encouraged, and implement it after sending it for approval and publication by the State Council.

Foreign investors and foreign-invested enterprises investing in the specified industries, fields, and regions as provided for in the preceding paragraph, may enjoy preferential treatment in accordance with the provisions of laws, administrative regulations, or the State Council, in areas such as public finance, tax, finance, and land use.

Article 14: Where foreign investors expand their investments in mainland China with the earnings from their investments in mainland China, they are to lawfully enjoy corresponding benefits.

Article 15: Foreign invested-enterprises are to participate equally in efforts to draft national standards, industry standards, local standards, and group standards in accordance with law, and must not be illegally restricted by any units or individuals.

Foreign invested-enterprises may submit recommendations for opening projects on compulsory state standards to the State Council's administrative departments for standardization, and may submit comments and recommendations in processes such as drafting standards, technology reviews, as well as implementation of standards, and may undertake relvant work in accordance with provisions.

Foreign-invested enterprises may participate in efforts to translate national standards into foreign languages.

Article 16: Unless the technical requirements of foreign-invested enterprises' public standards are higher than those in the compulsory standards, relevant government departments must not apply technical standards higher than those in the technical standards for foreign-invested enterprises, and must not compel or covertly compel foreign-invested enterprises to use recommended standards of group standards.

Article 17: Foreign-invested enterprises' free entry into the government procurement market in corresponding areas and industries must not be restricted or frustrated through any means by any unit or individual.

Departments for the oversight and management of government procurement, procurers, and procurement agencies shall follow the laws and administrative regulations related to government procurement to ensure foreign-invested enterprises' participation in government procurement through fair competition, and there must not be unreasonable requirements restricting suppliers' form of ownership, organizational form, stockholder structure, or investors' nationality in published information on government,procurement, determination of supplier requirements and inspection of credentials, assessment standards, and other such areas, so as to implement differential or discriminatory treatment for foreign-invested enterprises.

Article 18: Departments for the oversight and management of government procurement shall provide guidance and services for government procurement equally to domestic enterprises and foreign-invested enterprises.

Article 19: Foreign-invested enterprises may lawfully conduct financing using finance tools, such as stock issuances, corporate bonds, and public or non-public offerings either within mainland China or outside it, or by borrowing from financial institutions, and other means.

Relevant regulatory departments and financial institutions shall follow requirements and procedures consistent with those for domestic investment to handle relevant formalities for foreign-invested enterprises conducting financing in accordance with the preceding paragraph.

Foreign-invested enterprises may follow relevant state provisions to borrow from abroad.

Article 20: As necessary to promote foreign investment, and on the basis of actual conditions, local people's governments at the county level or above may draft policy measures within the scope of their legally-prescribed authority to promote and facilitate foreign investment.

Local people's governments at the county level or above that are drafting policy measures to promote and facilitate foreign investment shall comply with the provisions of laws, administrative regulations, and local regulations, being oriented towards high-quality development, and upholding the principles of being advantageous to increasing economic economic, social efficacy, and ecological efficacy.

Article 21: The competent departments for commerce and investment under the State Council, together with other relevant departments of the state council, are to compile comprehensive foreign investment guidelines. The competent departments under the state council related to industries, may compile foreign investment guidelines for that industry or field as necessary. The relevant departments of local people's governments at the county level or above are to compile foreign investment guidelines based on actual needs and the duties and division of labor determined by that level of government.

Foreign investment guidelines shall include content related to foreign investment such as laws and regulations, policy measures, data, handbooks for handling matters, and analysis of the investment atmosphere.

Foreign investment guidelines shall be published on government websites, and promptly updated.

Chapter III: Investment Protection

Article 22: The State will not expropriate the investment of foreign investors. That special circumstances were it is necessary for the public interest to expropriate or requisition foreign investors' investments shall be clear provided for in law, and foreign investors' investments must not be expropriated or requisitioned based on grounds other than law. Where the State may expropriates or requisitions the investment of foreign investors in accordance with the provisions of law, fair and reasonable compensation shall be promptly given.

Article 23: Foreign investors' capital contributions, profits, capital gains, income from asset disposal, intellectual property right royalties, compensation or indemnification obtained in accordance with law, liquidation income, and so forth, that are made or obtained in mainland China, may be freely transferred into or out of mainland China in RMB or foreign exchange in accordance with law; and the currency, amounts, and frequency of import or export, must not be restricted by any unit or individual.

The salary and other lawful income of foreign national staff of foreign-invested enterprises may be freely remitted after taxes are paid in accordance with Chinese tax law and administrative regulations.

Article 24: The state is to establish a punitive compensation system for violations of intellectual property rights, promote the establishment of rapid collaborative protection mechanisms for intellectual property rights, complete diversified dispute resolution mechanisms for intellectual property rights disputes and mechanisms for assistance in protecting intellectual property rights, to increase the force of protections for foreign investors' and foreign-invested enterprises' intellectual property rights.

The intellectual property rights of foreign investors and foreign-invested enterprises shall be equally protected in the drafting of standards in accordance with law, and where foreign investors' or foreign-invested enterprises' patents are involved, it shall be handled in accordance with the relevant management provisions of state standards involving patents.

Article 25: Administrative organs and their staffs must not use the performance of administrative management duties such as handling registration, approvals or filings for investment projects, and administrative permits, as well as implementing oversight inspections, administrative punishments, or administrative compulsion, to compel or covertly compel foreign investors or foreign-invested enterprises to transfer technology.

Article 26: Where administrative organs lawfully performing their duties truly need foreign investors or foreign-invested enterprises to provide materials or information related to their commercial secrets, it shall be restricted to the scope required for performance of the duties, and the scope fo those informed is to be strictly controlled such that staff which is unrelated to performance of the duties must not have contact with the materials or information.

Administrative organs shall establish and complete internal management systems, employing effective measures to protect the commercial secrets of foreign investors and foreign-invested enterprises that are learned of during the lawful performance of duties; where the law requires disclosure of information from performance of duties, it must not contain commercial secrets; and where it is necessary to share information with other administrative organs, information relating to commercial secrets shall be processed to prevent leaks, except where laws or administrative regulations provide otherwise.

Article 27: All levels of people's government and their relevant departments drafting normative documents involving foreign investment shall conduct legality reviews and fair competition inspections in accordance with State Council provisions.

Foreign investors and foreign-invested enterprises that feel that a normative document drafted by a state council department, local people's government, or its departments, and upon which an administrative act was based, is unlawful, hey may request a review of the normative document when they raise a lawsuit over the administrative act.

Article 28: "Policy commitments" as used in article 25 of the Foreign Investment Law refers to promises by all levels of local people's governments regarding the benefits, facilitation conditions, and so forth that foreign investors or foreign-invested enterprises may enjoy in those regions.

Local people's governments of any level and their relevant departments must not exceed their legally-prescribed scope of authority to make policy commitments to foreign investors or foreign-invested enterprises. Policy commitments shall be made in writing, and the content shall comply with laws and regulations and relevant state policies.

Article 29: Local people's governments at all levels and their relevant departments shall perform on policy commitments lawfully made to foreign investors and foreign-invested enterprises as well as on all kind of lawfully concluded contracts; policy commitments and contract agreements must not be modified, for reasons other than for the national interest or societal public interest, and agreements must not be breached or renounced for reasons such as adjustment of administrative regions, government transitions, adjustments to organizations, functions, or personnel responsibilities.

Article 30: The competent departments for commerce under the State Council, together with relevant State Council departments, are to establish mechanisms for work on complaints from foreign-invested enterprises (hereinafter simple 'complaint work mechanisms), promptly addressing issues with a major impact in the nation as well as other major and complicated issues on which feedback is given by foreign-invested enterprises or their investors, coordinate improvements of policy measures related to foreign investment, and conduct oversight of the entire nation's efforts on complaints form foreign-invested enterprises.

As needed based on actual conditions, local people's governments at the county level or above are to organize relevant departments to establish complaint work mechanisms, promptly addressing issues on which feedback is given by foreign-invested enterprises or their investors in that region, and coordinating improvement of policy measures on foreign investment drafted by that region. Local people's governments at the county level or above shall designate the department or body that is to take the lead in complaint work mechanisms.

The departments taking the lead in complain work mechanisms, which are designated by the competent departments for commerce under the State Council and local people's governments, are to undertake routine work of compaints work mechanisms.

Article 31: Complaint work mechanisms shall follow the principles of high efficiency, convenience, and ease, improving work rules and complaint channels, and drafting guides for complaints. The component and leading units for complaint work mechanisms, their primary duties, work rules, channels for complaints, and complaint guides shall be made public.

Where the complaint work mechanisms coordinate resolution of foreign-invested enterprises or their investors' reports of violations of their lawful rights and interests by the administrative actions of administrative organs or their staffs, they may learn about the situation from the administrative organs or their staffs and the relevant administrative organs and their staffs shall cooperate.

Where foreign-invested enterprises or their investors report or relevant issues through the complaint work mechanisms or apply for coordination of a resolution, they must not be suppressed or retaliated against by any unit or individual.

Article 32: The complaint work mechanisms shall analyze and summarize issues reported by foreign-invested enterprises or their investors which are typical or common, and promptly submit suggestions to the local people's government at that level on strengthening protections for foreign investments and improving the atmosphere for foreign investment.

Article 33: Except as otherwise provided by laws or regulations, foreign-invested enterprises have the right to make their own decisions on participating in or leaving chambers of commerce, associations, and other social organizations, and there must be no interference by any units or individuals.

In accordance with laws, regulations, and their charters, chambers of commerce and associations are to strengthen industry self-discipline, promptly giving feedback on industry demands, and providing members with information services, publicity and training, market expansion, exchanges on economics and trade, rights protection, dispute resolution, and other services.

The state is to safeguard chambers of commerce and associations' carrying out of relevant activities in accordance with the provisions of laws, regulations, and charters.

Chapter IV: Investment Management

Article 34: For fields in which the Negative List for Foreign Investment Market Access provides that investment is restricted, foreign investors making investments shall meet the restrictive requirements, such as for shareholder ratios and senior managers, that are provided for in the negative list.

Where the Negative List for Foreign Investment Market Access makes restrictive provisions on stock ownership by foreign investors in field, and the foreign investors make investments in that field by establishing a partnership, the ration of foreign investors' voting rights in the partnership agreement should comply with the restrictive provisions of the negative list on the ration of shareholders.

Article 35: Where wholly owned enterprises established outside of mainland China by Chinese natural persons, legal persons, or other organizations make investments inside mainland China, upon review by the competent departments under the State Council and approval by the State Council, they may be excused from the restrictions of the special management measures of the Negative List for Foreign Investment Market Access.

"Legal persons or other organizations" as used in the preceding paragraph, does not include foreign-invested enterprises.

Article 36: Where the approval or recording of investment projects need to be processed for foreign investment, it is to be implemented in accordance with the relevant provisions of the State Council and the departments in charge of investment under the State Council.

Article 37: Where foreign investors invest in industries or fields that require permits in accordance with law, except where laws or administrative regulations otherwise provide, the regulatory departments responsible for carrying out permitting shall review foreign investors' applications for permits according to the same requirements and procedures as for domestic capital, must not add permit conditions or apply stricter permit requirements for foreign investors, and must not add additional steps in review, materials for review, or require other extra requirements.

Relevant regulatory departments shall use diverse methods to optimize approval services and increase the efficiency of approvals. Permit matters that meet all conditions and requirements may be handled through means such as information pledges in accordance with relevant provisions.

Article 38: When departments for market oversight and management handle registration of foreign-invested enterprises in accordance with law, they are to review whether they comply with the Negative List for Foreign Investment Market Access's restrictive requirements for stock ratios, senior management and so forth; but where other relevant regulatory departments have already reviewed them while handling relevant formalities, the market oversight and management departments do are not to repeat review.

Article 39: Foreign investors or foreign-invested enterprises shall submit investment information to the competent departments for commerce through the enterprise registration system and the enterprise credit information disclosure system.

The State Council departments for commerce and market oversight and management are to complete connections and work linkages between related business systems, clarifying the specific processes for reporting foreign investment information, and strengthening guidance on the sending of foreign investment information.

Article 40: The content, scope and frequency of foreign investment information reports, is to be determined by the State Council departments of commerce together with the State Council departments for market oversight and management, and other relevant departments, in accordance with actual needs and the principle of reducing the burden on foreign investors and foreign-invested enterprises as much as possible. In determining the content, scope and frequency of foreign investment information reports, the opinions of foreign investors, foreign-invested enterprises, and other relevant parties shall be fully heard.

Except as otherwise provided by laws or administrative regulations, foreign investment information obtained by the relevant departments in the course of performing their duties shall be promptly shared with the departments for commerce.

Article 41: Investment information sent by foreign investors and foreign-invested enterprises shall be truthful, accurate, and complete.

The departments in charge of commerce shall establish and complete systems for the retention and management of foreign investment information.

Chapter V: Supplemental Provisions

Article 42: For foreign-invested enterprises that were established in accordance with the "P.R.C. Chinese-Foreign Equity Joint Ventures Law," the "P.R.C. Wholly Foreign-Owned Enterprises Law," or the "P.R.C. Chinese-Foreign Contractual Joint Ventures Law" before Foreign Investment Law took effect (hereinafter simply 'pre-existing foreign-invested enterprises"), where their organization form or structure is inconsistent with those required in the "PR.C. Company Law" and the "P.R.C. Partnership Enterprise Law" the state encourages them to lawfully modify their organizational forms within five years following the implementation of the Foreign Investment Law.

Where pre-existing foreign-invested enterprises as provided for in the preceding paragraph, have not lawfully handled modification procedures within 5 years of the Foreign Investment Law being implemented, they shall handle modification formalities within 6 months of January 1, 2025; and where modification formalities are not completed within this time, the organs for enterprise registration are not to handle other registration matters for that enterprise and may announce the relevant circumstance on the enterprise information announcement system.

Specific measures for pre-existing foreign-invested enterprises handling formalities for modification of organizational form and organizational bodies are to be drafted by the State Council departments for market oversight and management together with relevant State Council departments. The State Council department for market oversight and management shall compile and publish guidebooks for handling matters, clarifying the specific process for handling modification procedures and so forth.

Article 43: After the Foreign Investment Law takes effect, the joint operators and cooperators in pre-existing foreign-invested enterprises may continue to follow the agreed upon terms in their contract on methods for profit allocation, distribution of surplus property, etc., during the period of cooperation.

Article 44: For investors from the Hong Kong and Macao Special Autonomous Region investing in the mainland, refer to the Foreign Investment Law and these Regulations, except where laws, administrative regulations, or the State Council provide otherwise.

For investors from the Taiwan region making investments in the mainland, apply the provisions of the "P.R.C. Law on the Protection of Investments by Taiwan Compatriots" and the "Implementation Regulations for the P.R.C. Law on the Protection of Investments by Taiwan Compatriots" (Hereinafter "P.R.C. Law on the Protection of Investments by Taiwan Compatriots and its implementation regulations"); and where the P.R.C. Law on the Protection of Investments by Taiwan Compatriots and its implementation regulations do not have provisions, implementation is to be with reference to the Foreign Investment Law and these Regulations.

Investment by overseas Chinese in mainland China is implemented with reference to the Foreign Investment Law and these Regulations.

Article 45: These Regulations are to take effect on January 1, 2020. The "Implementation Regulations for the P.R.C. Chinese-Foreign Equity Joint Ventures Law," the "Temporary Provisions Periods for Wholly Foreign-Owned Enterprises", the "Implementation Regulations for the P.R.C. Chinese-Foreign Contractual Joint Ventures Law" are revoked at the same time.