PRC, Wholly Foreign-owned Enterprise Law（Revised）Ⅰ

　　（Passed on 12 April 1986 by the 4st Session of the 6th NPC, revised in the Amendment to the Decision on 31 October 2000 by the Standing Committee of the 18th Session of the 9th NPC）

　　Article 1: In order to expand foreign economic co-operation and technological exchange and to promote the development of the Chinese national economy, the People's Republic of China shall permit foreign enterprises and other economic organizations or individuals （hereafter "foreign investors"） to establish wholly foreign-owned enterprises within Chinese territory, and shall protect the lawful rights and interests of such enterprises.

　　Article 2: The term "wholly foreign-owned enterprises" as used in this Law shall refer to those enterprises established within Chinese territory, in accordance with the relevant Chinese laws, with capital provided solely by the foreign investor. It does not include branches established in China by foreign enterprises or other economic organizations.

　　Article 3: Wholly foreign-owned enterprises must benefit the development of the China's national economy. The State shall encourage the establishment of wholly foreign-owned enterprises that export commodities or that are technologically advanced.

　　The State Council shall stipulate industries in which the establishment of wholly foreign-owned enterprises is prohibited or restricted.

　　Article 4: The investments, profits and other legitimate rights and interests of foreign investors in China shall be protected by Chinese law.
　　Foreign investors must obey Chinese laws and regulations, and shall not harm the social public interest of China.

　　Article 5: The State shall not nationalize or expropriate wholly foreign-owned enterprises. In special circumstances, where necessary for the public interest, a wholly foreign-owned enterprise may be expropriated in accordance with legal procedures, and appropriate compensation paid.

　　Article 6: An application for establishment of wholly foreign-owned enterprises shall be submitted for examination and approval by the State Council department in charge of foreign economic relations and trade or an organization authorized by the State Council. The examination and approval authority shall, within 90 days of receipt of the application, make a decision whether or not to approve the application.

　　Article 7: After approval of an application for establishment of a wholly foreign-owned enterprise, the foreign investor shall, within 30 days of receipt of the approval certificate, apply for registration with the administrative authorities for industry and commerce and obtain a business licence. The date of issue of the business licence of an enterprise with the sole foreign investment is the date of establishment of the enterprise.

　　Article 8: A wholly foreign-owned enterprise that meets the conditions for legal personality under the relevant Chinese laws shall obtain such status in accordance with the law.

　　Article 9: A wholly foreign-owned enterprise shall invest in China within the time limit approved by the examination and approval authority. Where it fails to invest within the required time, the administrative authorities for industry and commerce shall have the right to revoke its business licence.
　　The administrative authorities for industry and commerce shall carry out inspection and supervision of the investment status of wholly foreign-owned enterprises.

　　Article 10: In the event of division, merger or other major changes, a wholly foreign-owned enterprise shall report for approval by the examination and approval authority and carry out procedures for registration of such changes with the administrative authorities for industry and commerce.

　　Article 11: A wholly foreign-owned enterprise shall carry out its operation and management in accordance with the approved articles of association of the enterprise and free from interference.

　　Article 12: A wholly foreign-owned enterprise employing Chinese staff and workers shall sign contracts in accordance with the law. The contracts shall clearly stipulate such matters as employment, dismissal, remuneration, welfare, labour protection and labour insurance.