When can a FIE begin to invest onshore and what limits these investments?
A FIE may start investing onshore as soon as they complete 3 steps:
- The registered capital of the FIE has been entirely paid up.
- They have begun to make profits.
- They have a reliable operational record.
At the same time, even if the FIEs have all the above mentioned traits, the government may still place limits on how much may be invested. The aggregate amount of investments must not exceed 50% of the investing FIE's net capital. Also, the invested amount does not include an increases in capital resulting from the capitalization of its profits.
FIEs are also banned from investing in industries where foreign investment is prohibited. However, it is not necessary for these FIEs to obtain approval from the local MOFTEC if they are investing in a sector where foreign investment is permitted.