China -  Chinese law firm

It is said that FIE laws have been revised early in 2001. What are the major changes?

It is said that FIE laws have been revised early in 2001. What are the major changes?

There are mainly three laws on foreign invested enterprises in China, namely the Law on Chinese-Foreign Equity Joint Ventures, the Law on Chinese-Foreign Contractual Joint Ventures, and the Law on Wholly Foreign-owned Enterprises.

These three laws and their respective implementation rules have been modified in basically three aspects:

  1. The requirement that FIEs should maintain its balance of foreign exchange income and expenditures by achieving certain exportation so as to balance its foreign exchange expenditures has been deleted;

  2. The requirement that Chinese-foreign Joint Ventures shall make preferred purchase of domestic products or resources has been deleted;

  3. Exportation obligations have also been deleted. Thus FIEs do not have to export all or most of its products and can take advantage of the vast Chinese domestic market.

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