About the New Law
As we all well known, the <Foreign Investment Law> will come into effect on January 1, 2020.
The new law has made unified regulations on the access, promotion, protection and management of the foreign investment. And it is the new basic law in the field of foreign investment in my country.
Advantages of the New Law
- Provide a strong legal guarantee for promoting a higher level of opening.
- Formulate and improve supporting regulations.
- Refine the main legal system determined by the foreign investment law
- It is of great significance to ensure the effective implementation of the Foreign Investment Law
- Legislative position in line with the foreign investment law supporting administrative regulations
- Strictly implement the legislative principles and purposes of the Foreign Investment Law
- More prominently promote and protect the main tone of foreign investment
- Continuously optimize the foreign investment environment, further boost foreign investor confidence and stabilize investment expectations
- Further opening up to the outside world and economic and social development
On the one hand, it clarifies the matters that need to be detailed in the foreign investment law.
On the other hand, it enhances the feasibility of the legal system and guarantees the effective implementation of the law.
Moreover, China adjusts the negative list in time according to needs.
Current laws applicable to foreign investors
For the conditions, procedures, and time limits for foreign investors to handle,
China will be equal in the following aspects:
- Funding arrangement
- Land supply
- Tax reduction
- Qualification permit
- Project declaration
- Human resources policy
- National mandatory standards
Discount for foreign-invested enterprises
According to the needs of the national economy and social development, China has formulated a catalogue of industries that encourage foreign investment.
This directory catalogue specific industries, fields, and regions encouraged and guiding foreign investors.
Foreign enterprises have preferential treatments in finance, taxation, finance and land use.
Foreign investors expand investment in China.
This investment could be a be foreign investment income generated in China.
Besides, foreign investors have corresponding discounts according to law.
According to local conditions, governments at and above the county level can provide policy. This policy measures for promotion and facilitation. For example, fee reduction, land use index guarantee, public service provision, etc.
These measures purpose should be good at promoting high-quality development. Also, it is conducive to improving economic, social and ecological benefits. And then, it is conducive to continuously optimizing the foreign investment environment.
Foreign investors can participate in government work
Foreign-invested enterprises may participate in the following formulation and revision work. And they are on an equal basis with domestic-funded enterprises:
- National Standard
- Industry standards
- Local standards
- Group standards
Foreign-invested enterprises may not only formulate their standards according to their needs but also combine other enterprises.
Besides, foreign investors can make comments and suggestions in the following areas:
- Standard project
- Technical review
- Information feedback
In addition, foreign businessmen can also undertake work related to the above.
And the can-do standard foreign language translation work.
Besides, foreign investors should also strengthen supervision and inspection of government procurement activities.
As you can see, they can also correct and investigate the government’s violations of laws and regulations by foreign investors:
- Differential treatment
The government cannot interfere with：
First, the government cannot hinder or restrict foreign businessmen from entering the government procurement market in the region and industry.
Secondly, purchasers and procurement agencies of government procurement shall not restrict suppliers on unreasonable conditions.
Administrative agencies shall not use administrative means to force foreign businessmen to transfer technology.
In addition, no technical requirements higher than the compulsory standards shall be raised by foreign investors.
Also, the government shall not restrict the currency, amount, and frequency of remittances and remittances.
If the government and relevant departments and their staff violate laws and regulations, China will punish them according to law.
If no action is taken within the time limit, the person directly in charge shall be punished according to law.
For patents of foreign investors, the government shall handle the patent management regulations.
The foreign investor provided materials and information. And the information refers business secrets. The government can only know the necessary part, according to its duties.
In addition, personnel unrelated shall not have access to relevant materials and information.
Of course, the government has the responsibility to protect foreign business secrets.
The government and its relevant departments formulate regulatory documents. And they should concern foreign investment. So, they shall conduct legality review according to the regulations of the State Council.
When the government changes the contract, it will compensate the foreign businessmen fairly and reasonably.
For Property Export:
In the first place, foreign investors can freely remit and remit RMB and foreign exchange property in China.
Moreover，foreign employees can remit their legal income freely according to law.
For the protection of foreign investment, China’s new law has made the following measures.
The state does not impose levy on foreign investors’ investments
Under special circumstances, the state implements expropriation for the sake of public interest. In this case, China will give compensation according to its market value in time.
At the same time, if foreign investors do not agree to the levy, they may apply for administrative reconsideration.
Change of Organization Form
Within five years after the implementation of the Foreign Investment Law, the foreign investors shall adjust the organization form according to the new law.
And they can also handle the change registration according to law.
It is also possible to continue to retain the original enterprise organization form and organization.
Since January 1, 2025, if the enterprise has not been adjusted according to law, the relevant department will not process other registration items of its application and formulate the relevant circumstances.
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