State Council, Amending the «PRC, Wholly Foreign-owned Enterprise Law Implementing Rules» Decision

国务院关于修改《中华人民共和国外资企业法实施细则》的決定

May 02, 2001 | BY

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Promulgated: April 12 2001Effective: as of date of promulgationMain contents: The revised Law has the following amendments:1. Article 3 is amended as follows:…

Clp Reference: 2320/01.04.12 Promulgated: 2001-04-12 Effective: 2001-04-12

Promulgated: April 12 2001
Effective: as of date of promulgation

Main contents: The revised Law has the following amendments:
1. Article 3 is amended as follows: "The establishment of wholly foreign-owned enterprises must be beneficial to the development of China's national economy, and yield notable economic benefits. The State encourages wholly foreign-owned enterprises to use advanced technology and equipment, develop new products, upgrade and replace existing products, save energy and raw materials, and the State also encourages the establishment of wholly foreign-owned enterprises that export products."

2. Article 4 and Article 5 are consolidated and read as follows: "Industries in which the establishment of wholly foreign-owned enterprises is prohibited or restricted shall be handled in accordance with the provisions of the State for directing foreign investment and the Foreign Investment Industrial Guidance Catalogue."

3. The words "the ratio of sales of products on the domestic and foreign markets" are deleted from Article 10.

4. The words "the ratio of sales on the Chinese and foreign markets" are deleted from Article 15.

5. Article 22 is amended as follows: "A wholly foreign-owned enterprise may not reduce its registered capital during its term of operation. However, where it is necessary to make such reduction due to changes in total investment and production or the scale of operation or production, the reduction shall be subject to the approval of the examination and approval authority."

6. Paragraph One of Article 27 is amended as follows: "Where a foreign investor makes its capital contribution in the form of machinery and equipment according to its value, machinery and equipment shall be that required for the production by the wholly foreign-owned enterprise."

7. Paragraph One of Article 28 is amended as follows: "Where a foreign investor makes its capital contribution in the form of industrial property rights or proprietary technology according to its value, such rights or technology shall be owned by the foreign investor."

8. Article 43 is deleted.

9. Article 45 is amended as follows:

"Wholly foreign-owned enterprises may sell their products on the Chinese market. The State encourages wholly foreign-owned enterprises to export the products they produce."

10. Paragraph Two of Article 46 is amended as follows: "Wholly foreign-owned enterprises may sell their own products in China or appoint a commercial organization to sell their products on their behalf."

11. Paragraphs Two and Three of Article 48 are deleted.

12. The phrase "Wholly foreign-owned enterprises shall be exempt from Customs Duty and Consolidated Industrial and Commercial Tax on the following imported materials" in Article 52 is amended and now read as follows: "Wholly foreign-owned enterprises shall be entitled to tax reductions or tax exemptions in accordance with the relevant provisions of the tax laws of China when importing the following supplies."

13. Article 53 is amended as follows: "Export products produced by wholly foreign-owned enterprises, except for those the export of which is restricted by China, shall be entitled to tax reductions, tax exemptions or tax refunds in accordance with the relevant provisions of the tax laws of China."

14. Article 56 is deleted.

15. Article 84 is amended as follows: "Contracts between wholly foreign-owned enterprises and other companies, enterprises or economic organizations, or individuals shall be governed by the PRC, Contract Law."

16. Article 87 is deleted.

clp reference:2320/01.04.12promulgated:2001-04-12effective:2001-04-12

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