Foreign Investment Law of the People’s Republic of China (Adopted on 15 March 2019, effective 1 January 2020)
Chapter I – General Provisions
Article 1
This Law is enacted pursuant to the Constitution for the purposes of further expanding opening-up, actively promoting foreign investment, protecting the lawful rights and interests of foreign investors, regulating foreign investment administration, fostering a new system of comprehensive opening-up, and promoting the healthy development of the socialist market economy.
Article 2
This Law applies to foreign investment within the territory of the People’s Republic of China.
For the purpose of this Law, “foreign investment” refers to investment activities directly or indirectly conducted by foreign natural persons, enterprises, or other organizations in China, including:
- establishing a foreign-invested enterprise either independently or jointly with other investors;
- acquiring shares, equity interests, property shares, or other rights and interests of enterprises in China;
- investing in new projects either independently or jointly;
- other investment activities prescribed by laws, administrative regulations, or the State Council.
Article 3
The State adheres to the basic national policy of opening-up, encourages foreign investment according to law, creates a stable, transparent, and predictable investment environment, and promotes high-quality development.
Article 4
The State implements the management systems of pre-establishment national treatment and the negative list for foreign investment.
Pre-establishment national treatment means treatment granted to foreign investors and their investments at the entry stage that is not less favorable than that accorded to domestic investors.
The negative list refers to special administrative measures for foreign investment access in specific sectors.
Foreign investment outside the negative list shall receive national treatment.
Article 5
The State protects the investment, returns, and other lawful rights and interests of foreign investors in accordance with the law.
Article 6
Foreign-invested enterprises shall participate in government procurement activities through fair competition in accordance with the law.
Article 7
Foreign-invested enterprises shall be treated equally in formulating and revising national, industrial, and local standards.
Article 8
Foreign investors may freely remit into or out of China, in renminbi or foreign currency, their capital contributions, profits, capital gains, intellectual property royalties, compensation, liquidation proceeds, and other lawful income.
Article 9
No administrative department or its personnel may compel technology transfer by administrative means.
Chapter II – Investment Promotion
Article 10
The State ensures that foreign-invested enterprises may participate equally in policy-making processes such as formulating laws, regulations, and rules.
Article 11
Foreign-invested enterprises shall enjoy equal access to government procurement markets.
Article 12
Foreign-invested enterprises may participate in the formulation of standards on an equal basis.
Article 13
Employees of foreign-invested enterprises may establish and join trade unions and conduct union activities in accordance with the law.
Article 14
The State may establish or expand pilot free trade zones and other areas for further opening-up.
Article 15
Foreign-invested enterprises may apply equally to participate in scientific research projects and national science and technology programs.
Article 16
The State provides policy support to encourage foreign investment in specific regions and industries.
Article 17
Foreign-invested enterprises are eligible to apply for financing through public issuance of shares, corporate bonds, and other securities.
Article 18
Local governments may, within their statutory authority, formulate foreign investment promotion policies.
Chapter III – Investment Protection
Article 19
The State shall not expropriate foreign investment.
Under special circumstances where expropriation or requisition is required for public interest, it shall be conducted in accordance with legal procedures and fair and reasonable compensation shall be made in a timely manner.
Article 20
Foreign investors’ intellectual property rights shall be protected according to law.
Technology cooperation shall follow the principles of voluntariness and business rules.
Article 21
Administrative departments and their personnel shall keep confidential the trade secrets of foreign investors and foreign-invested enterprises obtained during performance of their duties.
Article 22
Administrative departments shall not set discriminatory conditions for foreign-invested enterprises in areas such as licensing, qualification, or regulatory compliance.
Article 23
Local governments shall honor the policy commitments made to foreign investors and the contracts entered into in accordance with law.
Article 24
The State establishes a foreign investment complaint mechanism to handle complaints lodged by foreign-invested enterprises.
Article 25
Foreign-invested enterprises may report administrative acts that violate their lawful rights and interests; relevant government departments shall address such complaints promptly.
Chapter IV – Investment Management
Article 26
Foreign investment management shall follow the negative list.
Investments in areas outside the negative list are subject to administration identical to that applicable to domestic investment.
Article 27
Foreign-invested enterprises shall complete enterprise registration and other administrative formalities in accordance with relevant laws.
Article 28
Foreign investors shall not invest in areas prohibited by the negative list.
For restricted areas, investment conditions stipulated in the negative list must be met.
Article 29
Foreign-invested enterprises shall establish and improve their internal governance structure in accordance with the Company Law and other applicable laws.
Article 30
Foreign-invested enterprises shall comply with Chinese laws and regulations on labor, taxation, accounting, and other areas.
Article 31
Administrative departments shall not impose special or discriminatory requirements on foreign investors in areas such as licensing, qualification, or standard conditions.
Article 32
Foreign-invested enterprises may participate equally in standardization work and shall be treated the same as domestic enterprises.
Article 33
Government procurement shall treat products and services provided by foreign-invested enterprises equally.
Article 34
The State establishes a foreign investment information reporting system.
Foreign investors and foreign-invested enterprises shall submit investment information through the enterprise registration system and the enterprise credit information publicity system.
Article 35
The State conducts security review of foreign investment that affects or may affect national security.
Chapter V – Legal Liability
Article 36
If a foreign investor invests in prohibited sectors under the negative list, corrective action shall be ordered and illegal gains shall be confiscated.
If investment conditions in restricted sectors are violated, similar measures shall apply.
Article 37
Foreign investors and foreign-invested enterprises failing to report investment information truthfully shall be ordered to make corrections.
Article 38
Where government departments or their personnel abuse power, neglect duty, or engage in malpractice in foreign investment administration, they shall bear legal liability.
Article 39
If an administrative authority violates a policy commitment or contract concluded in accordance with the law, causing losses to foreign investors, it shall bear legal responsibility.
Chapter VI – Supplementary Provisions
Article 40
Where foreign investment relates to the financial sector, other laws and administrative regulations shall prevail.
Article 41
This Law applies to investment activities carried out by investors from Hong Kong, Macao, and Taiwan.
Article 42
This Law takes effect on January 1, 2020.
The Law on Sino-Foreign Equity Joint Ventures, the Law on Foreign-Invested Enterprises, and the Law on Sino-Foreign Cooperative Joint Ventures shall be repealed simultaneously.
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