PRC Foreign Investment Law (Draft)

中华人民共和国外商投资法 (草案)

January 09, 2019 | BY

Susan Mok

 Issued: December 26, 2018 Applicability: This Law shall govern foreign investment in China. For the purposes of this…

Promulgated: 2018-12-26
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Issued: December 26, 2018

Applicability: This Law shall govern foreign investment in China.

For the purposes of this Law, the term “foreign investment” means the foreign investment activities carried out directly or indirectly by foreign natural persons, enterprises or other organizations (Foreign Investors) in China, the same including the following:

(1)        the investment in a new project, the establishment of a foreign-invested enterprise or an increased investment in China by a Foreign Investor alone or in concert with other investors; and

(2)        the securing by Foreign Investors of shares of, equity in, shares in the property of, or other similar rights and interests in, enterprises in China through acquisitions (Article 2).

Main contents: The state ensures that foreign-invested enterprises can participate in government procurement activities on an equal footing. Governments, in their procurement, shall, in accordance with the law, treat the products produced in China by foreign-invested enterprises on an equal footing (Article 16).

Foreign-invested enterprises may lawfully seek financing through the public offering of shares, corporate bonds or other such securities, as well as by other means (Article 17).

The conditions of technical cooperation in the course of foreign investment shall be determined by the investors through negotiations. Administrative authorities and their working personnel may not use administrative means to compel technology transfer (Article 22).

If a foreign-invested enterprise deems that the administrative act of an administrative authority or its working personnel infringes upon its lawful rights and interests, it may resolve the same through the foreign-invested enterprise complaint mechanism (Article 25).

issued:2018-12-26

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