Implementing Regulations for the Foreign Investment Law of the People’s Republic of China were adopted on December 12, 2019, and are hereby promulgated. They shall come into force on January 1, 2020.
Chapter I – General Provisions
Article 1
These Regulations are formulated pursuant to the Foreign Investment Law of the People’s Republic of China (hereinafter referred to as the “Foreign Investment Law”).
Article 2
The State encourages and promotes foreign investment, protects the lawful rights and interests of foreign investors, regulates the administration of foreign investment, continuously improves the foreign investment environment, and advances a higher level of opening-up.
Article 3
The “other investors” referred to in Items (1) and (3) of Paragraph 2, Article 2 of the Foreign Investment Law include natural persons of China.
Article 4
The Negative List for Foreign Investment Access (hereinafter referred to as the “Negative List”) shall be proposed by the investment department of the State Council together with the commerce department of the State Council and other relevant departments, and shall be issued by the State Council or issued by the investment department and the commerce department of the State Council upon approval by the State Council.
The State shall adjust the Negative List at appropriate times according to the need to further expand opening-up and the requirements of economic and social development. Adjustments to the Negative List shall follow the procedures set forth in the preceding paragraph.
Article 5
The commerce department, the investment department of the State Council, and other relevant departments shall, in accordance with their respective duties, closely coordinate and collaborate with each other to jointly carry out work related to foreign investment promotion, protection, and administration.
People’s governments at or above the county level shall strengthen organizational leadership for foreign investment promotion, protection, and administration; support and urge relevant departments to carry out such work in accordance with laws, regulations, and their statutory duties; and coordinate and resolve major issues arising from foreign investment promotion, protection, and administration in a timely manner.
Chapter II – Investment Promotion
Article 6
Governments and their relevant departments shall treat foreign-invested enterprises and domestic enterprises equally in areas such as the allocation of government funds, land supply, tax and fee reductions or exemptions, qualification licensing, standard setting, project applications, and human resources policies, in accordance with the law.
Policies formulated by governments and their relevant departments to support enterprise development shall be disclosed in accordance with the law.
Where enterprises are required to submit applications for matters related to policy implementation, governments and their relevant departments shall disclose the application conditions, procedures, time limits, and other information, and shall treat foreign-invested enterprises and domestic enterprises equally in the review process.
Article 7
When formulating administrative regulations, rules, or normative documents related to foreign investment, or when governments and their relevant departments draft laws or local regulations related to foreign investment, they shall, based on actual needs, solicit opinions from foreign-invested enterprises and relevant chambers of commerce and associations through written consultations, symposiums, expert discussions, hearings, or other means.
Opinions and suggestions that are widely raised or that concern major rights and obligations of foreign-invested enterprises shall be responded to appropriately, including feedback on whether they have been adopted.
Normative documents related to foreign investment shall be publicly released in accordance with the law, and those that have not been released shall not serve as the basis for administrative management.
For normative documents closely related to the production and operation of foreign-invested enterprises, the time between public release and implementation shall be reasonably determined based on actual circumstances.
Article 8
People’s governments at all levels shall, under the principle of government leadership with multi-party participation, establish and improve foreign investment service systems, and continuously enhance their capacity and level in providing services for foreign investment.
Article 9
Governments and their relevant departments shall, through government websites and the National Integrated Online Government Service Platform,集中列明 laws, regulations, rules, normative documents, policy measures, and investment project information related to foreign investment, and shall strengthen publicity and interpretation through various channels and means to provide consultation and guidance services to foreign investors and foreign-invested enterprises.
Article 10
The “special economic areas” referred to in Article 13 of the Foreign Investment Law refer to designated zones approved by the State that implement more extensive policies and measures for opening-up.
Pilot foreign investment policies implemented in certain regions that have proven effective in practice may be extended to other regions or nationwide based on actual circumstances.
Article 11
The State, based on the needs of national economic and social development, shall formulate a Catalogue of Encouraged Industries for Foreign Investment, specifying industries, fields, and regions where foreign investment is encouraged and guided.
The catalogue shall be drafted by the investment department of the State Council together with the commerce department of the State Council and other relevant departments, and shall be issued by the investment department and the commerce department of the State Council after approval by the State Council.
Article 12
Foreign investors and foreign-invested enterprises may enjoy preferential treatment in areas such as fiscal support, taxation, finance, and land use in accordance with laws, administrative regulations, or provisions of the State Council.
Where foreign investors reinvest in China using their investment income obtained within China, they shall enjoy corresponding preferential treatment in accordance with the law.
Article 13
Foreign-invested enterprises may, in accordance with the law, participate on an equal basis with domestic enterprises in the formulation and revision of national standards, industry standards, local standards, and group standards. Foreign-invested enterprises may also, as needed, independently formulate enterprise standards or jointly formulate such standards with other enterprises.
Foreign-invested enterprises may submit proposals for standard-setting to standardization administrative authorities and relevant administrative departments, and may submit comments and suggestions in the processes of project approval, drafting, technical review, feedback on implementation, and assessment. They may also undertake work related to drafting and reviewing standards, as well as foreign-language translation of standards, in accordance with regulations.
Standardization administrative authorities and relevant administrative authorities shall establish and improve relevant working mechanisms, enhance transparency in the formulation and revision of standards, and promote the disclosure of information throughout the entire process.
Article 14
Mandatory national standards shall apply equally to foreign-invested enterprises and domestic enterprises.
No technical requirements higher than mandatory standards may be imposed specifically on foreign-invested enterprises.
Article 15
Governments and their relevant departments may not obstruct or restrict foreign-invested enterprises from freely entering government procurement markets in their regions or industries.
Purchasers and procurement agencies in government procurement may not impose differential or discriminatory treatment against foreign-invested enterprises in areas such as publication of procurement information, determination of supplier qualifications, and evaluation criteria.
They may not restrict suppliers based on ownership structure, organizational form, equity composition, investor nationality, product or service brand, or other unreasonable conditions, nor may they differentiate between products manufactured or services provided in China by foreign-invested enterprises and those provided by domestic enterprises.
Article 16
Foreign-invested enterprises may, in accordance with the Government Procurement Law of the People’s Republic of China (hereinafter referred to as the “Government Procurement Law”) and its implementing regulations, raise inquiries or challenges to purchasers or procurement agencies regarding government procurement activities, and may submit complaints to government procurement supervisory authorities.
Purchasers, procurement agencies, and supervisory authorities shall respond or issue handling decisions within prescribed time limits.
Article 17
Government procurement supervisory departments and other relevant departments shall strengthen supervision and inspection of government procurement activities, and shall, in accordance with the law, rectify and investigate acts of differential or discriminatory treatment against foreign-invested enterprises.
Article 18
Foreign-invested enterprises may raise funds through public issuance of stocks, corporate bonds, and other securities, or through public or private issuance of other financing instruments, or through borrowing foreign debt, in accordance with the law, whether within China or abroad.
Article 19
People’s governments at or above the county level may, within their statutory authority and in accordance with laws, administrative regulations, and local regulations, formulate policies and measures for foreign investment promotion and facilitation in areas such as fee reductions, land-use quota guarantees, and the provision of public services.
Policies adopted by local governments for promoting and facilitating foreign investment shall be oriented toward high-quality development, enhance economic, social, and ecological benefits, and contribute to the continuous optimization of the foreign investment environment.
Article 20
Relevant competent departments shall prepare and publish foreign investment guidelines to provide services and convenience to foreign investors and foreign-invested enterprises.
These guidelines shall include information on the investment environment, service guides for foreign investment procedures, investment project information, relevant data, and shall be updated promptly.
Chapter III – Investment Protection
Article 21
The State shall not expropriate the investments of foreign investors.
Under special circumstances, where the State expropriates the investments of foreign investors for public interest, such expropriation shall be carried out in accordance with statutory procedures, in a non-discriminatory manner, and compensation shall be made promptly based on the market value of the expropriated investment.
Where a foreign investor disagrees with the expropriation decision, it may apply for administrative reconsideration or file an administrative lawsuit in accordance with the law.
Article 22
Capital contributions, profits, capital gains, proceeds from asset disposal, royalties obtained from licensing intellectual property rights, lawful compensation or indemnity, liquidation proceeds, and other lawful income obtained by foreign investors in China may, in accordance with the law, be freely remitted into and out of China in renminbi or foreign currency.
No entity or individual may unlawfully impose restrictions on the currency, amount, or frequency of such remittances.
The wages and other lawful income of foreign employees of foreign-invested enterprises, as well as employees from Hong Kong, Macao, and Taiwan, may be freely remitted out of China in accordance with the law.
Article 23
The State shall strengthen penalties for intellectual property infringement, continuously enhance intellectual property enforcement, promote the establishment of a rapid and coordinated protection mechanism for intellectual property rights, improve diversified dispute resolution mechanisms for intellectual property, and provide equal protection for the intellectual property rights of foreign investors and foreign-invested enterprises.
Where patents of foreign investors or foreign-invested enterprises are involved in the development of standards, relevant administrative regulations regarding standards involving patents shall apply.
Article 24
Administrative authorities (including organizations authorized by laws and regulations to administer public affairs, the same below) and their personnel shall not use administrative licensing, administrative inspections, administrative penalties, administrative enforcement, or other administrative measures to compel or indirectly compel foreign investors or foreign-invested enterprises to transfer technology.
Article 25
Where administrative authorities, in performing their duties according to law, require foreign investors or foreign-invested enterprises to provide materials or information involving trade secrets, such requirements shall be limited to the scope necessary for the performance of duties, and the scope of persons with access to such materials or information shall be strictly controlled. Personnel not involved in the performance of duties shall not access such materials or information.
Administrative authorities shall establish and improve internal management systems, and adopt effective measures to protect trade secrets of foreign investors or foreign-invested enterprises learned in the course of performing their duties.
Where information must be shared with other administrative authorities according to law, trade secrets contained in such information shall be protected and prevented from disclosure.
Article 26
When formulating normative documents related to foreign investment, governments and their relevant departments shall conduct legality review in accordance with regulations of the State Council.
Where a foreign investor or foreign-invested enterprise considers that the normative document formulated by departments of the State Council or local people’s governments and their departments, which serves as the basis for an administrative action, is unlawful, it may request a review of the normative document when applying for administrative reconsideration or filing an administrative lawsuit in accordance with the law.
Article 27
The “policy commitments” referred to in Article 25 of the Foreign Investment Law mean written commitments made by local people’s governments at all levels and their relevant departments, within their statutory authority, regarding support policies, preferential treatment, and convenience applicable to foreign investors and foreign-invested enterprises investing in the region.
The content of policy commitments shall comply with laws and regulations.
Article 28
Local people’s governments at all levels and their relevant departments shall honor policy commitments made in accordance with the law to foreign investors and foreign-invested enterprises, as well as various contracts lawfully entered into.
They shall not breach or cancel commitments or contracts on the grounds of administrative division adjustments, government restructuring, institutional or functional changes, or personnel changes.
Where policy commitments or contractual terms need to be changed due to national interests or public interests, such changes shall be made in accordance with statutory authority and procedures, and fair and reasonable compensation shall be promptly made for losses suffered by foreign investors or foreign-invested enterprises.
Article 29
People’s governments at or above the county level and their relevant departments shall, under the principles of openness, transparency, high efficiency, and convenience, establish and improve mechanisms for handling complaints from foreign-invested enterprises, promptly address issues raised by foreign-invested enterprises or their investors, and coordinate improvements to relevant policies and measures.
The commerce department under the State Council, together with other relevant departments, shall establish an inter-departmental joint meeting mechanism for handling complaints from foreign-invested enterprises, to coordinate and promote the handling of complaints at the central level and to provide guidance and supervision for complaint handling at the local level.
People’s governments at or above the county level shall designate departments or institutions responsible for accepting complaints from foreign-invested enterprises or their investors in their respective regions.
The commerce department under the State Council and the designated departments or institutions of local people’s governments at or above the county level shall improve the rules for complaint handling, establish sound complaint channels, and clarify time limits for handling complaints. Complaint handling rules, methods, and time limits shall be made public.
Article 30
Where a foreign-invested enterprise or its investor believes that an administrative action by an administrative authority or its personnel has infringed its lawful rights and interests, and applies for coordinated resolution through the complaint handling mechanism for foreign-invested enterprises, relevant parties may, during the coordination process, inquire with the administrative authority or its personnel about relevant circumstances, and the administrative authority or its personnel shall cooperate. The results of coordination shall be provided to the applicant in writing in a timely manner.
Applying for coordinated resolution through the complaint mechanism shall not affect the foreign-invested enterprise or its investor’s right to apply for administrative reconsideration or file an administrative lawsuit in accordance with the law.
Article 31
No entity or individual may suppress or retaliate against foreign-invested enterprises or their investors for raising issues or applying for coordinated resolution through the complaint handling mechanism for foreign-invested enterprises.
In addition to the complaint mechanism, foreign-invested enterprises or their investors may also raise issues with governments and their departments through other lawful channels.
Article 32
Foreign-invested enterprises may establish chambers of commerce or associations in accordance with the law. Except where otherwise provided by laws or regulations, foreign-invested enterprises have the right to independently decide whether to join or withdraw from chambers of commerce or associations; no entity or individual may interfere.
Chambers of commerce or associations shall, in accordance with laws, regulations, and their charters, strengthen industry self-discipline, promptly reflect industry concerns, and provide services to their members in areas such as information consultation, publicity and training, market development, business exchanges, rights protection, and dispute resolution.
The State supports chambers of commerce and associations in carrying out relevant activities in accordance with laws, regulations, and their charters.
Chapter IV – Investment Management
Article 33
Foreign investors shall not invest in fields where investment is prohibited under the Negative List.
Where investment in certain fields is restricted under the Negative List, foreign investors conducting investment activities shall comply with restrictive special administrative measures for market access, including equity ratio requirements, requirements for senior management personnel, and other restrictions stipulated in the Negative List.
Article 34
During the lawful performance of duties, where relevant competent authorities determine that a foreign investor intends to invest in a field listed in the Negative List but does not meet the applicable requirements, they shall not grant approvals, process enterprise registration, or handle other related matters.
Where fixed-asset investment projects are subject to approval, relevant authorities shall not process such approvals.
Relevant authorities shall strengthen supervision and inspection of the implementation of the Negative List.
Where it is discovered that a foreign investor has invested in a prohibited field under the Negative List, or that a foreign investor’s investment activities violate restrictive special administrative measures under the Negative List, such cases shall be handled in accordance with Article 36 of the Foreign Investment Law.
Article 35
Where foreign investors invest in industries or fields for which a license is required by law, and unless otherwise provided by laws or administrative regulations, relevant competent authorities responsible for implementing licensing shall review foreign investors’ applications under the same conditions and procedures applicable to domestic investors.
No discriminatory requirements may be imposed on foreign investors regarding licensing conditions, application materials, review procedures, or review time limits.
Relevant authorities responsible for implementing licensing shall optimize approval services and improve approval efficiency through various means.
For licensing matters that meet relevant conditions and requirements, authorities may, in accordance with applicable regulations, handle such matters using the notification-and-commitment system.
Article 36
Where foreign investment requires project approval or filing, such approval or filing shall be handled in accordance with relevant national regulations.
Article 37
Registration of foreign-invested enterprises shall be handled by the market regulation department under the State Council or the market regulation departments of local people’s governments authorized by the State Council.
The market regulation department under the State Council shall publish a list of market regulation departments it authorizes.
The registered capital of a foreign-invested enterprise may be expressed in renminbi or in freely convertible foreign currency.
Article 38
Foreign investors or foreign-invested enterprises shall submit investment information to the commerce authorities through the enterprise registration system and the enterprise credit information publicity system.
The commerce department under the State Council and the market regulation department under the State Council shall ensure proper connection and coordination among relevant business systems and shall provide guidance to foreign investors and foreign-invested enterprises on submitting investment information.
Article 39
The content, scope, frequency, and specific procedures for foreign investment information reporting shall be determined and published jointly by the commerce department under the State Council and the market regulation department under the State Council, together with other relevant departments, under the principles of necessity, efficiency, and convenience.
Commerce authorities and other relevant departments shall strengthen information sharing.
Information that can be obtained through information sharing among departments shall not be repeatedly required from foreign investors or foreign-invested enterprises.
Investment information submitted by foreign investors or foreign-invested enterprises shall be truthful, accurate, and complete.
Article 40
The State shall establish a foreign investment security review system.
Foreign investment that affects or may affect national security shall undergo a security review.
Chapter V – Legal Liability
Article 41
Governments, relevant departments, and their personnel shall bear responsibility in accordance with laws and regulations if they commit any of the following acts:
- failing to treat foreign-invested enterprises and domestic enterprises equally in the formulation or implementation of relevant policies;
- unlawfully restricting foreign-invested enterprises from equal participation in the formulation and revision of standards, or applying technical requirements higher than mandatory standards specifically to foreign-invested enterprises;
- unlawfully restricting foreign investors from remitting funds into or out of China;
- failing to fulfill policy commitments or contracts lawfully entered into with foreign investors or foreign-invested enterprises; making policy commitments beyond statutory authority; or making policy commitments whose content violates laws or regulations.
Article 42
Where purchasers or procurement agencies in government procurement impose unreasonable conditions that result in differential or discriminatory treatment against foreign-invested enterprises, their legal liability shall be pursued in accordance with the Government Procurement Law and its implementing regulations.
Where such conduct affects or is likely to affect the bid-winning or transaction outcome, it shall be handled in accordance with the Government Procurement Law and its implementing regulations.
Where government procurement supervisory authorities fail to handle complaints filed by foreign-invested enterprises within the prescribed time limits, the directly responsible persons in charge and other directly responsible personnel shall be subject to disciplinary actions in accordance with the law.
Article 43
Where administrative authorities or their personnel, through administrative measures, compel or indirectly compel foreign investors or foreign-invested enterprises to transfer technology, the directly responsible persons in charge and other directly responsible personnel shall be subject to disciplinary actions in accordance with the law.
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