The Regulation on the Implementation of the Foreign Investment Law of the Peoples Republic of China, as adopted at the 74th executive meeting of the State Council on December 12, 2019, is hereby issued, and shall come into force on January 1, 2020.

Premier: Li Keqiang

December 26, 2019

Regulations on the Implementation of the Foreign Investment Law of the Peoples Republic of China

Chapter I General Provisions

Article 1 This Regulation is developed in accordance with the Foreign Investment Law of the Peoples Republic of China (hereinafter referred to as the Foreign Investment Law).

Article 2 The state shall encourage and promote foreign investment, protect the lawful rights and interests of foreign investors, regulate the administration of foreign investment, continuously optimize the foreign investment environment, and advance a higher level of opening up.

Article 3 For the purposes of subparagraphs (1) and (3), paragraph 2, Article 2 of the Foreign Investment Law, other investors includes Chinese natural persons.

Article 4 The negative list for the access of foreign investment (hereinafter referred to as the negative list) shall be proposed by the investment department of the State Council in conjunction with the commerce and other appropriate departments of the State Council, and be reported to and issued by the State Council or after being reported to and approved by the State Council, be issued by the investment and commerce departments of the State Council.

The state shall adjust the negative list in due time based on the needs for the further expansion of opening up and the economic and social development. The provision of the preceding paragraph shall apply to the procedures for adjusting the negative list.

Article 5The commerce department, investment department, and other appropriate departments of the State Council shall, according to their division of duties, jointly and effectively conduct the promotion, protection, and administration of foreign investment through close cooperation and collaboration.

The local peoples governments at and above the county level shall enhance the organization and leadership of the promotion, protection and administration of foreign investment, support and supervise the promotion, protection and administration of foreign investment conducted by the appropriate departments in accordance with laws and regulations and their division of duties, and coordinate and resolve major issues in the promotion, protection and administration of foreign investment in a timely manner.

Chapter II Investment Promotion

Article 6Governments and their appropriate departments shall, in accordance with the law, equally treat foreign-invested enterprises and domestic-funded enterprises in such aspects as government funding arrangements, land supply, tax and fee reduction and exemption, qualification licensing, development of standards, project applications, and human resource policies.

The policies developed by governments and their appropriate departments to support the development of enterprises shall be disclosed to the public in accordance with the law. For matters that require applications of enterprises in the implementation of policies, governments and their appropriate departments shall disclose to the public the conditions, steps, and time limits, among others, for such applications, and during examination, equally treat foreign-invested enterprises and domestic-funded enterprises in accordance with the law.

Article 7In the development of administrative regulations, rules, and regulatory documents relating to foreign investment, or when governments and their appropriate departments draft laws and local regulations relating to foreign investment, comments and recommendations from foreign-invested enterprises and relevant chambers of commerce and associations, among others, shall be solicited according to the actual circumstances in multiples forms, such as written requests for comments, symposiums, justification meetings, and hearings; and for comments and recommendations involving central issues or major rights and obligations of foreign-invested enterprises, feedbacks regarding the adoption of such comments and recommendations shall be provided by appropriate means.

Regulatory documents relating to foreign investment shall be published in a timely manner in accordance with the law, and those unpublished shall not serve as the basis for public administration. For regulatory documents closely related to the production and operation activities of foreign-invested enterprises, the time between their issuance and implementation shall be rationally determined according to the actual circumstances.

Article 8The peoples governments at all levels shall establish and improve their foreign investment service systems under the principles of government dominance and participation by multiple parties, and continuously raise their foreign investment service capabilities and levels.

Article 9Governments and their appropriate departments shall, in a centralized manner, publish the laws, regulations, rules, regulatory documents, policies and measures relating to foreign investment and investment project information through government websites and national integrated online government service platform, strengthen publicity and interpretation through various channels and in various methods, and provide advisory, guidance and other services for foreign investors and foreign-invested enterprises.

Article 10 For the purposes of Article 13 of the Foreign Investment Law, special economic zones means the specific zones established with the approval of the state where stronger policies and measures for opening up are implemented.

The experimental foreign investment policies and measures implemented by the state in some regions, which have proved practicable, may extend to other regions or nationwide according to the actual circumstances.

Article 11 As needed for national economic and social development, the state shall develop a catalogue of industries for encouraging foreign investment to specify the industries, fields, and regions where foreign investors are encouraged and directed to invest. The catalogue of industries for encouraging foreign investment shall be drafted by the investment department of the State Council in conjunction with the commerce and other appropriate departments of the State Council, and after being reported to and approved by the State Council, be issued by the investment and commerce departments of the State Council.

Article 12 Foreign investors and foreign-invested enterprises may enjoy fiscal, taxation, financial, land use, and other preferences in accordance with laws, administrative regulations, or the provisions issued by the State Council.

Foreign investors increasing their investment within China with their return on investment within China may enjoy corresponding preferences in accordance with the law.

Article 13Foreign-invested d enterprises and domestic-funded enterprises shall equally participate in the development and revision of national standards, industry standards, local standards, and group standards in accordance with the law. Foreign-invested enterprises may, as needed, develop enterprise standards independently or jointly with other enterprises.

Foreign-invested enterprises may propose the initiation of development of standards to the standardization and other appropriate administrations, offer comments and recommendations during the course of, among others, the initiation of development, drafting and technical review of standards and the provision of feedbacks on and assessment of the implementation of standards, and, according to the relevant provisions, undertake work related to the drafting and technical review of standards as well as translation of standards into foreign languages.

The standardization and other appropriate administrations shall establish and improve the relevant working mechanisms, increase the transparency of the development and revision of standards, and promote the public disclosure of the whole process of development and revision of standards.

Article 14The compulsory standards developed by the state shall apply equally to foreign-invested enterprises and domestic-funded enterprises, and no technical requirements higher than compulsory standards may exclusively apply to foreign-invested enterprises.

Article 15 Governments and their appropriate departments shall not obstruct or restrict foreign-invested enterprises from freely entering the government procurement markets within their respective regions or regulated industries.

Purchasers and procurement agencies in government procurement shall not apply differential or discriminatory treatment to foreign-invested enterprises in such aspects as the release of government procurement information, determination of conditions for suppliers, eligibility examination and bid evaluation criteria, shall not limit the suppliers by imposing ownership form, organizational form, equity structure, country of investor, product or service brand, and other unreasonable conditions, and shall not treat differently the products produced or services provided within China by foreign-invested enterprises and those of domestic-funded enterprises.

Article 16Foreign-invested enterprises may, in accordance with the provisions of the Government Procurement Law of the Peoples Republic of China (hereinafter referred to as the Government Procurement Law) and its implementing regulation, file inquiries and raise questions on government procurement activities with purchasers and procurement agencies, and file complaints with the governmental procurement regulation departments. Purchasers, procurement agencies, and governmental procurement regulation departments shall reply or make disposition decisions within the prescribed time limit.

Article 17 The governmental procurement regulation departments and other appropriate departments shall strengthen the supervision and inspection of government procurement activities, and in accordance with the law, correct, investigate, and punish violations of laws and regulations such as differential or discriminatory treatment to foreign-invested enterprises.

Article 18Foreign-invested enterprises may legally raise funds within or outside China by means such as the public offerings of stocks, corporate bonds, and other securities, the public or non-public offerings of other financing instruments, and external debts.

Article 19The local peoples governments at and above the county level may, in accordance with the provisions of laws, administrative regulations and local regulations, develop foreign investment promotion and facilitation policies and measures within their respective statutory authority in such aspects as fee reduction and exemption, guarantee of land use quota, and provision of public services.

The local governments at and above the county level shall develop foreign investment promotion and facilitation policies and measures, guided by the direction of promoting high-quality development, improving economic, social and ecological benefits, and continuously optimizing the foreign investment environment.

Article 20Relevant departments shall prepare and release foreign investment guidelines to provide services and facilities for foreign investors and foreign-invested enterprises. Foreign investment guidelines shall include contents such as the introduction of investment environment, guidance for foreign investment affairs, information on investment projects and related data information, and shall be updated in a timely manner.

Chapter III Investment Protection

Article 21The state will not expropriate the investment of foreign investors.

Under special conditions, the state may expropriate foreign investors’ investment for the need of public interests in line with laws and regulations. However the process shall be conducted in a non-discriminatory manner in accordance with legal procedures, and timely compensation shall be made according to the market value of the expropriated investment.

If foreign investors are not satisfied with the decision on expropriation, they may apply for administrative reconsideration or file an administrative lawsuit in accordance with laws.

Article 22Foreign investors capital contributions, profits, capital gains, income from asset disposal, licensed intellectual property right royalties, compensation or indemnification obtained in accordance with law, liquidation income, etc., which are made or obtained within China, may be freely transferred into or out of China in RMB or foreign exchange in accordance with law. No unit or individual may illegally restrict the currency, the amount and the frequency of such transfer.

The wage income and other lawful income of foreign employees and employees from Hong Kong, Macao and Taiwan of foreign-invested enterprises shall be freely transferred out of China according to the law.

Article 23 The state shall strengthen the punishment for intellectual property right infringements, continuously enhance the enforcement of intellectual property rights, promote the establishment of a rapid collaborative protection mechanism for intellectual property rights, improve the diversified settlement mechanism for intellectual property disputes, and equally protect intellectual property rights of foreign investors and foreign-invested enterprises.

In the formulation of standards, patents belonging to foreign investors and foreign-invested enterprises shall be handled in accordance with relevant management provisions for standards concerning patents.

Article 24Administrative organs (including organizations authorized by laws and regulations to manage public affairs, similarly hereinafter) and their employees shall not implement administrative licensing, administrative inspection, administrative punishment, administrative compulsion and other administrative actions to force or disguisedly force foreign investors and foreign-invested enterprises to transfer their technologies.

Article 25If administrative organs, in performing their duties in accordance with the law, require foreign investors or foreign-invested enterprises to provide materials and information concerning business secrets, such materials and information shall be limited to the extent necessary for the performance of their duties, and the scope of those with access to the knowledge shall be strictly controlled. The relevant materials or information shall not be disclosed to any person unrelated to the performance of their duties.

Administrative organs shall establish and improve their internal management systems and take effective measures to protect foreign investors and foreign-invested enterprises business secrets that are known during the course of performing their duties. Where it is necessary to share information with other administrative organs according to law, the business secrets contained in the information shall be kept confidential and protected from disclosure.

Article 26Regulatory documents prepared by governments and their appropriate departments for foreign investment shall go through legality review in accordance with the provisions of the State Council.

If foreign investors and foreign-invested enterprises believe that regulatory documents prepared by the State Council departments and local peoples governments and their departments, on which administrative actions are based, are illegal, they may request a review of the regulatory documents when applying for administrative review or filing an administrative lawsuit against such administrative actions according to the law.

Article 27The policy commitments as mentioned in Article 25 of the Foreign Investment Law refers to the written commitments made by local peoples governments at all levels and their appropriate departments within their respective statutory authority in such aspects as applicable supporting policies, preferential treatment and facilitation for foreign investors and foreign-invested enterprises investing in the region. The contents of the policy commitments shall confirm to laws and regulations.

Article 28The local peoples governments at all levels and their appropriate departments shall perform the policy commitments legally made to foreign investors and foreign-invested enterprises and the various types of legally signed contracts, and shall not break such commitments and contracts on the grounds of administrative division adjustment, government change, institutional or functional adjustment, and related personnel replacement, and the like. If the policy commitments or contractual agreements need to be changed due to national interests or social public interests, such change shall be conducted in accordance with statutory authorities and procedures, and the affected foreign investors and foreign-invested enterprises shall be compensated in a timely and fair manner according to law.

Article 29The peoples governments at and above the county level and their appropriate departments shall, in accordance with the principles of openness, transparency, efficiency and convenience, establish and improve the complaint mechanisms for foreign-invested enterprises, solve the problems reported by foreign-invested enterprises or their investors in a timely manner, and coordinate and improve relevant policies and measures.

The commerce department of the State Council, in conjunction with other appropriate departments of the State Council, shall establish the inter-ministerial joint meeting mechanism for complaints of foreign-invested enterprises, to coordinate and promote the handling of complaints of foreign-invested enterprises at the central level and guide and supervise the handling of complaints of local foreign-invested enterprises. The local peoples governments at and above the county level shall respectively designate a department or institution responsible for receiving complaints from foreign-invested enterprises or their investors in their respective region.

The commerce department of the State Council and the departments or institutions designated by the local peoples governments at and above the county level shall improve the complaint principles and the complaint methods and define the time limit for complaint handling. The complaint principles, complaint methods and the time limit for complaint handling shall be made public.

Article 30Where foreign-invested enterprises or their investors think the administrative acts of administrative organs and their employees have infringed upon their lawful rights and interests, and apply for coordination and settlement through the complaint mechanism of foreign-invested enterprises, relevant parties may request relevant information from such administrative organs and their employees in the course of coordination, and such administrative organs and their employees should cooperate. The result of the coordination shall be notified to the applicant in writing in a timely manner.

If a foreign-invested enterprise or its investor applies for coordinated settlement of relevant issues in accordance with the provisions of the preceding paragraph, it shall not affect its application for administrative reconsideration and filing of an administrative lawsuit.

Article 31No unit or individual may suppress or retaliate, if foreign-invested enterprises or their investors report through the complaint mechanism for foreign-invested enterprises or apply for coordination to solve relevant problems.

In addition to the complaint mechanism for foreign-invested enterprises, foreign-invested enterprises or their investors can also report problems to the governments and its appropriate departments through other legal channels.

Article 32Foreign-invested enterprises may establish chambers of commerce and associations in accordance with law. Unless otherwise stipulated by laws and regulations, foreign-invested enterprises have the right to decide to participate in or withdraw from chambers of commerce and associations, and no unit or individual may interfere.

In accordance with the provisions of laws, regulations, and articles of association, chambers of commerce and associations shall strengthen industry self-discipline, timely reflect industry demands, and provide their members with services such as information consultation, publicity training, market development, economic and trade exchanges, protection of rights and interests, and dispute resolution.

The state shall support the chambers of commerce and associations to conduct relevant activities in accordance with the provisions of laws, regulations, and articles of association.

Chapter IV Investment Management

Article 33Foreign investors shall not invest in the fields where foreign investment is prohibited by the negative list. To invest in the fields where investment is restricted by the negative list, foreign investors shall comply with the special administrative measures for access restriction such as the equity requirements and senior management requirements specified in the negative list.

Article 34The relevant departments, in the course of performing their duties according to law, shall not handle the license, enterprise registration or other relevant matters for any foreign investor that is to invest in any field covered by the negative list in breach of the regulations governing the negative list; and shall not do with the matters related to approval of fixed-asset investment projects.

The relevant departments shall strengthen the supervision and inspection for the implementation of the negative list. If any foreign investor is found investing in fields where foreign investment is prohibited by the negative list, or that foreign investor investment activities violate the special administrative measures for access restriction provided for by the negative list, the relevant departments shall take actions in accordance with Article 36 of the Foreign Investment Law.

Article 35For industries or fields that require foreign investors to obtain a license to invest according to law, unless otherwise stipulated by laws and administrative regulations, the relevant departments responsible for licensing shall review foreign investors’ license applications in accordance with the same conditions and procedures as domestic investors. They shall not impose discriminatory requirements on foreign investors with regard to licensing conditions, application materials, review process, review deadline and others.

The relevant departments responsible for licensing shall optimize review and approval services and improve the efficiency of review and approval by various means. Licensed items that meet the relevant conditions and requirements may be handled by means of notification and commitment in accordance with the relevant regulations.

Article 36If needed, the approval and filing of foreign investment projects shall be carried out in accordance with relevant national regulations.

Article 37Foreign-invested enterprises shall be registered with the market regulation department of the State Council or the market regulation departments of local peoples governments authorized by it, according to law. The market regulation department of the State Council shall publish a list of its authorized market regulation departments of local people’s governments.

The registered capital of the foreign-invested enterprises may be denominated in either RMB or any other freely convertible currency.

Article 38Foreign investors or foreign-invested enterprises shall submit investment information to the commerce department of the State Council through the enterprise registration system and enterprise credit information publicity system. The commerce department and market regulation department of the State Council shall do work on docking and coordination of relevant operation systems, and guide the submission of investment information by foreign investors and foreign-invested enterprises.

Article 39The content, scope, frequency and specific process of foreign investment information report shall be confirmed and published by the commerce department of the State Council in conjunction with the market regulation department and other relevant departments of the State Council in accordance with the principles of actual necessity, efficiency and convenience. The commerce department and other relevant departments shall strengthen information sharing, and any investment information that can be obtained through departmental information sharing shall not be required to be resubmitted by foreign investors or foreign-invested enterprises.

The investment information submitted by foreign investors or foreign-invested enterprises shall be true, accurate and complete.

Article 40The state shall develop a foreign investment security review system to check the security of all foreign investments that influence or may influence national security.

Chapter V Legal Liabilities

Article 41In any of the following cases, the governments and relevant departments and their employees shall be held accountable in accordance with the laws and regulations:

(1) Formulating or implementing relevant policies that do not equally treat foreign-invested enterprises and domestic-funded enterprises according to law;

(2) Illegally restricting foreign-invested enterprises from participating in the formulation and revision of standards on an equal basis, or specifically applying technical requirements higher than mandatory standards to foreign-invested enterprises;

(3) Illegally restricting foreign investors from remitting funds inward and outward;

(4) Failing to fulfill the policy commitments legally made to foreign investors and foreign-invested enterprises and the various types of legally signed contracts, making policy commitments beyond their statutory authorities, or making policy commitments inconsistent with laws and regulations.

Article 42If purchasers and procurement agencies in government procurement apply differential or discriminatory treatment to foreign-invested enterprises on unreasonable conditions, their legal liabilities shall be investigated in accordance with the provisions of the Government Procurement Law and its implementing regulation; and if the winner of bid or transaction results are affected or may be affected thereby, it shall be handled in accordance with the provisions of the Government Procurement Law and its implementing regulation.

If governmental procurement regulation departments fail to resolve the complaints of foreign-invested enterprises within the time limit, their heads and other persons directly in-charge shall be punished according to law.

Article 43Where administrative organs and their employees use administrative means to force or disguisedly force foreign investors or foreign-invested enterprises to transfer any technology, their heads and other persons directly in-charge shall be punished according to law.

Chapter VI Supplementary Provisions

Article 44Foreign-invested enterprises established in accordance with the Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Foreign-Funded Enterprises, or the Law of the Peoples Republic of China on Chinese-Foreign Contractual Joint Ventures before the implementation of the Foreign Investment Law (hereinafter referred to as existing foreign-invested enterprises) can adjust their organizational forms or structures in accordance with the provisions of the Company Law of the People’s Republic of China, the Partnership Enterprise Law of the Peoples Republic of China and other laws, and apply for registration of such changes according to law, or choose to retain their original organizational forms and structures, within five years after the implementation of the Foreign Investment Law.

Starting on January 1, 2025, the market regulation department will not handle other registration matters applied for by existing foreign-invested enterprises that have not adjusted their organizational forms or structures and applied for registration of change in accordance with the law, and will publicize such relevant circumstance.

Article 45The market regulation department of the State Council shall stipulate and announce specific matters related to registration of changes in organizational forms or structures and any other aspect of existing foreign-invested enterprises. The market regulation department of the State Council shall strengthen guidance for registration of changes. The market regulation department responsible for registering changes shall optimize services in multiple ways to provide convenience for enterprises applying for registration of changes.

Article 46After adjusting their organizational forms and structures in accordance with the law, existing foreign-invested enterprises can continue to cope with the equity or equity transfer methods, income distribution methods, and residual property distribution methods as agreed to in the original contract for joint-venture and cooperation parties.

Article 47The Foreign Investment Law and the relevant provisions of this Regulation shall apply to foreign-invested enterprises investing in China.

Article 48Unless otherwise stipulated by laws, administrative regulations or the State Council, the investors from Hong Kong Special Administrative Region and Macau Special Administrative Region shall invest in Chinese Mainland in accordance with the Foreign Investment Law and this Regulation.

Investors from Taiwan shall invest in Chinese Mainland in accordance with the provisions of the Law of the Peoples Republic of China on Protection of Investments by Taiwan Compatriots (hereinafter referred to as the Taiwan Compatriot Protection Law) and its detailed implementation rules; and matters not covered by the Taiwan Compatriot Protection Law and its detailed implementing rules shall be governed by the Foreign Investment Law and this Regulation.

Unless otherwise stipulated by laws, administrative regulations or the State Council, the Chinese citizens residing abroad shall invest in China in accordance with the Foreign Investment Law and this Regulation.

Article 49 This Regulation shall take effect on January 1, 2020. The Regulation on the Implementation of the Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures, theInterim Provisions on the Contract Term of Chinese-Foreign Equity Joint Ventures, the Detailed Rules for the Implementation of the Law of the People’s Republic of China on Foreign-Funded Enterprises, and the Detailed Rules for the Implementation of the Law of the Peoples Republic of China on Chinese-Foreign Contractual Joint Ventures will be abolished at the same time.

If any foreign investment provision formulated before January 1, 2020 is inconsistent with the Foreign Investment Law and this Regulation, the provisions of the Foreign Investment Law and this Regulation shall prevail.