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Corporate Service - China

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Q&A Regarding Foreign-invested Enterprise (1)

Answer
Q:
What does foreign investment refers to?
A:
Foreign investment refers to the investment activities directly or indirectly conducted in China by foreign natural persons, enterprises or other organizations (hereinafter referred to as foreign investors).

Q:
What situations are included in foreign investment?
A:
Foreign investment includes the following situations:
  1. Foreign investors establish foreign-invested enterprises in China alone or jointly with other investors;
  2. Foreign investors acquire shares, equity, property shares or other similar rights and interests of Chinese enterprises;
  3. Foreign investors invest in new projects in China alone or jointly with other investors;
  4. Investment in other ways as prescribed by laws, administrative regulations or the State Council.

Q:
What does foreign-investment enterprises refers to?
A:
Foreign-invested enterprises refer to enterprises wholly or partly invested by foreign investors and registered and established in China in accordance with Chinese law.

Q:
What requirements should foreign-invested enterprises meet?
A: Foreign investors and foreign-invested enterprises carrying out investment activities within the territory of China shall abide by Chinese laws and regulations and must not endanger China's national security or harm the societal public interest.

Q:
What are the types of foreign-invested enterprises?
A: According to the different proportions of shares and shares of foreign investors in the registered capital and assets of the enterprise and the different legal characteristics, foreign-invested enterprises can be divided into three types: Wholly Foreign-owned Enterprises, Sino-foreign Joint Enterprises and Sino-foreign Cooperative Enterprises.

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