The National People’s Congress Order of the President of the People’s Republic of China No. 48 The Decision of the National People’s Congress concerning revising for the Law of the People’s Republic of China on Chinese-Foreign President of the People’s Republic of China, Jiang Zemin March 15, 2001 Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures Article 1 With a view to expanding international economic co-operation and technical exchange, the People’s Republic of China permits foreign Article 2 The Chinese Government protects, in accordance with the law, the investment of foreign joint ventures, the profits due to them and Joint ventures shall follow the provisions of the laws and regulations of the People’s Republic of China in all their activities. The state does not practice nationalization and expropriation of a joint venture; under special circumstances, the state, in accordance Article 3 The joint venture agreement, contract and articles of association signed by the parties to the venture shall be submitted to the competent Article 4 A joint venture shall take the form of a limited liability company. The proportion of the investment contributed by the foreign joint venture (s) shall generally not be less than 25% of the registered The parties to the venture shall share the profits, risks and losses in proportion to their respective contributions to the registered No assignment of the registered capital of a joint venture shall be made without the consent of the other parties to the venture. Article 5 Each party to a joint venture may make its investment in cash, in kind or in industrial property rights, etc. The technology and the equipment that serve as a foreign joint ventures investment must be advanced technology and equipment that The investment of a Chinese joint venture may include the right to the use of a site provided for the joint venture during the period The various investments referred to above shall be specified in the joint venture contract and articles of association, and the value Article 6 A joint venture shall have a board of directors, which shall have its size and composition stipulated in the contract and the articles The board of directors is empowered, pursuant to the provisions of the articles of association of the joint venture, to discuss and The offices of president and vice-president(s) (or factory manager and deputy manager(s) shall be assumed by the respective parties Contracts shall be entered into in accordance with the law to prescribe the recruitment, dismissal, remuneration, welfare, labor protection, Article 7 The staff employees of the joint venture may establish trade unions in accordance with the law, carry out the activities of the trade Joint ventures shall provide necessary conditions for the activities of the trade unions thereof. Article 8 After payment, pursuant to the provisions of the tax laws of the People’s Republic of China, of the joint venture income tax on the A joint venture may enjoy the preferential treatment of reduction of or exemption from tax pursuant to relevant state taxation laws A foreign joint venture that reinvests in China its share of the net profit may apply for refund of a part of the income taxes already Article 9 A joint venture shall, with its business license, open a foreign exchange account at the banks or other financial organizations approved The pertinent foreign exchange transactions of a joint venture shall be conducted in accordance with the regulations on foreign exchange In its operating activities a joint venture may directly raise funds from foreign banks. All insurances of joint ventures shall be procured at the insurance companies within the territory of the People’s Republic of China. Article 10 The Joint venture may purchase the materials such as raw materials, fuels, etc. as needed within the approved scope of business either A joint venture is encouraged to market its products outside China. Export products may be distributed to foreign markets through Whenever necessary, a joint venture may establish branches outside China. Article 11 The net profit that a foreign joint venture receives after fulfilling its obligations under the laws and the agreement and the contract, A foreign joint venture shall be encouraged to deposit in the Bank of China foreign exchange that it is enpost_titled to remit abroad. Article 12 The wages, salaries and other legitimate income earned by the foreign staff and workers of a joint venture, after payment of the individual Article 13 The contract period of a joint venture may be decided differently according to its particular line of business and circumstance. The Article 14 In case of heavy losses, failure of a party to fulfill the obligations prescribed by the contract and the articles of association, Article 15 Disputes arising between the parties to a joint venture that the board of directors cannot settle through consultation may be settled Where no arbitration clauses have been included in the joint venture contract or no written arbitration agreement have been reached Article 16 This Law shall come into force on the date of its promulgation. |
The National People’s Congress
2001-03-15