Provisions Concerning the Administration of Foreign-funded
Business-starting Investment Enterprises

Decree of the Ministry of Foreign Trade and Economic Cooperation,
the Ministry of Science and Technology, the State Administration for
Industry and Commerce, the State Administration of Taxation and the
State Administration of Foreign Exchange  [2003] No.2
　　
Chapter I General Provisions

Article 1 The present Provisions are formulated to encourage
foreign-funded companies, enterprises and other economic
organizations or individuals (hereinafter referred to as foreign
investors) to come to China to engage in business-starting
investments, and to establish and perfect the mechanism of
business-starting investments in China in accordance with the Law of
the People's Republic of China on Chinese-foreign Contractual Joint
Ventures, 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-capital Enterprises, the Company Law of
the People's Republic of China and other related laws and
regulations.

Article 2 The term "foreign-funded business-starting investment
enterprise " (hereinafter referred to as FBIE refers to the
foreign-funded investment enterprises established by foreign
investors or by foreign investors jointly with companies,
enterprises or other economic organizations established and
registered in China in accordance with the Chinese law (hereinafter
referred to as Chinese investors). To establish an FBIE shall be in
conformity with the present Provisions. It shall mainly engage in
business-starting investments.
Article 3 The term "business-starting investment" means making
principal equity investments to high and new tech enterprises that
haven''t been listed in the stock market (hereinafter referred to as
invested enterprises), and providing management services to them for
the prospective capital gains.
Article 4 An FBIE is allowed to take the form of the
non-legal-person organization or the corporate organization.
　　As to a non-legal-person organization, the investors shall bear
joint liabilities for its debts. The investors may also specify in
the contract of the FBIE that: When the assets of an FBIE are not
enough to clear the debts of this enterprise, the indispensable
investors as stated in Article 7 shall bear joint liabilities and
the other investors shall bear the liabilities to the company within
the limit of contributions made by each of them.
　　For a corporate-form FBIE, the investors shall bear the
liabilities to the company within the limit of the amount of
investment made by each of them.
Article 5 The FBIEs shall abide by relevant laws and regulations of
China, shall be in conformity with the policies of foreign
investment industries and shall not damage the public interests of
China. The legitimate businesses and lawful rights and interests of
the FBIE within the borders of China shall be subject to the
protection of Chinese law.
Chapter II Establishment and Registration
Article 6 To establish an FBIE, the following requirements shall be
met:
(1) There are more than 2 but less than 50 investors, and at least
one shall be an indispensable investor as stated in Article 7;
(2) The investors of a non-legal-person organization shall subscribe
to a minimum total contribution in the sum of 10, 000, 000 U.S. $.
The investors of an incorporated FBIE shall subscribe to a minimum
total capital in the sum of 5, 000, 000 U.S. $. Except for the
indispensable investors as provided in Article 7, each of the other
investors shall subscribe to a minimum capital contribution no less
than 1, 000, 000 yuan. Foreign investors may contribute their
investments in convertible currencies and Chinese investors may
contribute their investments in Renminbi.
(3) It shall have definite organization form;
(4) It shall have a definite and legitimate investment direction;
(5) Except that the operations of such an enterprise are subject to
the management of a business-starting investment management company
under authorization, an FBIE shall have at least 3 professional
managerial persons who have practical experience in
business-starting investment;
(6) It shall meet the other requirements as provided in laws and
administrative regulations.
Article 7 An indispensable investor shall meet the following
requirements:
(1) Business-starting investment is its main business;
(2) The accumulative total capital managed by it in the three years
before the application is not less than 100, 000, 000 U.S. dollars,
and of which no less than 50, 000, 000 U.S. dollars have been used
in business-starting investment If the indispensable investor is a
Chinese investor, the accumulative total capital managed thereby in
the three years before the application is submitted is not less than
100, 000, 000 Yuan, and of which no less than 50, 000, 000 yuan have
been used in business-starting investment;
(3) It shall have at least 3 professional managerial persons who
have practical experience in business-starting investment;
(4) If the affiliated entity of an investor meets the
above-mentioned requirements, the investor may apply for the status
of an indispensable investor. The term "affiliated entity" in this
paragraph refers to an entity controlled by the investor, or an
entity that controls the investor, or another entity that subject to
the control of the same entity that controls the investor. The term
"control" in this paragraph means that the controlling party has a
voting power of more than 50 % over the controlled party.
(5) Neither the above-mentioned indispensable investor nor its
affiliated entity shall have any record of being prohibited from
engaging in business-starting investment or business of investment
consultancy, or being punished for the reason of cheat, by the
judicial departments and other relevant agencies of the country
where it is located;
(6) An indispensable investor of a non-legal-person enterprise shall
subscribe to and actually pay not less than 1 % of the subscribed
contributions and the actual total contributions respectively, and
it shall bear joint liabilities for the debts of this enterprise. An
indispensable investor of an incorporated FBIE shall subscribe to
and actually pay not less than 30% of the subscribed contributions
and the actual total contributions respectively.
Article 8 The following procedures shall be observed in the
establishment of an FBIE:
(1) The investors shall submit the establishment application and
relevant documents to the administrative departments in charge of
foreign trade and economic cooperation at the provincial level of
the place where the FBIE is to be established.
(2) The administrative departments in charge of foreign trade and
economic cooperation at the provincial level shall complete the
original examination and report to the Ministry of Foreign Trade and
Economic Cooperation (hereinafter referred to as the MOFTEC) within
15 days as of the acceptance of the above-mentioned materials.
(3) The MOFTEC shall, with the consent of the Ministry of Science &
Technology，make a written decision on approval or disapproval within
45 days as of the acceptance of all the above-mentioned materials.
And it shall issue a Certificate of Approval for Foreign-invested
Enterprises to the approved enterprises.
(4) With the approved of establishing an FBIE, the applicant shall
file an application for registration at the State Administration of
Industry and Commerce or at local bureaus with its authorization by
presenting the Certificate of Approval for Foreign-invested
Enterprise within one month as of the acceptance of the Certificate
of Approval for Foreign-invested Enterprise.
Article 9 The following documents shall be submitted to the MOFTEC
when applying for the establishment of an FBIE:
(1) an establishment application signed by the indispensable
investors;
(2) contracts and articles of association of the FBIE signed by all
the investors;
(3) a written declaration made by the indispensable investors
(covering: a. the investors meet the requirements as provided in
Article 7; b. all the materials submitted are genuine; and c. the
investors will strictly abide by the present provisions and other
relevant Chinese laws and regulations);
(4) a letter of legal advice issued by a law firm affirms that the
legal indispensable investors exist and the above-mentioned
declaration has got valid authorization and has been signed;
(5) explanations of the business-starting operations of the foreign
investors, explanations of the capital managed by them of the three
years before the application is submitted, explanations of the
investment made among the capital managed by them of the three years
before the application is submitted, resumes of its professional
managerial persons of business-starting investment;
(6) the registration certificate of the investors (photocopy) and
the certificate of the legal representative (photocopy);
(7) the notice of pre-approval of the name of the FBIE issued by the
name registration organ;
(8) If the qualifications of the indispensable investors are based
on the requirements as provided in paragraph (4) of Article 7, they
shall submit relevant materials of the affiliated entity that meets
the requirements;
(9) other documents related to the establishment application as
required by the examination and approval authority.
Article 10 The FBIEs shall give a clear indication of
"Business-starting Investment" in its name. Except for
business-starting investment enterprises, none of the other foreign
investment enterprises may use the aforesaid words in their name.
Article 11 In applying for establishing an FBIE, the following
documents shall be submitted to the registration organ and shall be
responsible for their authenticity and effectiveness:
(1) registration application signed by the chairman of the board of
directors or by the person-in-charge of the joint management
committee;
(2) contracts, articles of association, the documents and
certificate of approval issued by the approving authorities;
(3) legal license to do business or the certification of the ID of
the investor;
(4) credit certification of the investor;
(5) appointment documents and the certification of the ID of the
legal representative and archival documents of the directors and
managers of this enterprise;
(6) notice of pre-approval of its name;
(7) the certification of the address of the enterprise and the
certification of its business offices.
　　In the case of applying for establishing a non-legal-person
organization, the applicant shall submit the articles or agreement
of overseas indispensable investors besides the aforesaid materials.
Where an enterprise includes investors as provided in Article 7 (4)
of the present Provisions, the applicant shall submit the letter of
undertaking issued by its affiliated entity, which is to bear the
joint liabilities of investments. All of the aforesaid documents
should be written in Chinese. Those written in foreign languages
other than Chinese shall be accompanied by good Chinese
translations.
　　An FBIE should apply to the original registration organ for the
modification registration of its modified registration matters.
Article 12 Upon the approval of the registration organ, the
incorporated FBIEs shall be issued the business license of legal
entity, and the non-legal-person FBIEs shall be issued a business
license.
　　A business license shall clearly states the total registered
capital of the investors and the names of the dispensable investors.
Chapter III Capital Contributions and Relevant Modifications
Article 13 The capital contributions made by the investors of a
business-starting enterprise without qualifications of legal entity
and the relevant modifications shall be in conformity with the
following:
(1) The investors may pay the their subscribed capital by
installments according to the proceedings of the business-starting
investment, but the longest term shall be no more than 5 years. The
amount of capital to be invested at each stage shall be decided by
the FBIE itself according to the contract of the enterprise and the
agreement concluded by it and its invested enterprise. In the
contract, the investors shall stipulate liabilities of the investors
who do not pay the subscribed capital contributions and relevant
measures.
(2) During the period of the continuous existence of the FBIE, the
investors generally shall not reduce their subscribed amount of
capital. Upon approval of the examination and approval organ, an
investor may reduce its subscribed amount of capital if the said
amount exceeds 50 % of the total provided that it has obtained the
consent of the indispensable investors and the business-starting
FBIE isn''t in violation of the requirement of minimum registered
capital of 1, 000, 000 U.S. $ (The present provision shall not be
applicable to a case where an investor reduces its invested amount
of capital in accordance with item (5) of this Article or the FBIE
reduces the untapped capital when its term of investment expires).
In this case, the investors shall stipulate the conditions,
procedure and methods for reducing the subscribed amount of capital
in the contract of the FBIE;
(3) Indispensable investors shall not withdraw from the FBIE during
the period of its continuous existence. A necessary withdrawal under
a special circumstance shall be upon the consent of the investor
whose investment amount exceeds 50% of the total amount, and the
relevant rights and interests shall be assigned to the new investor
who satisfies the conditions as provided in Article 7. The contract
and the articles of association of this enterprise shall be modified
and shall be reported to the check and approving authority for
approval.
　　The transference of the other investors'' subscribed amount of
capital or invested amount of capital shall be done in compliance
with the contract of the FBIE and the assignee shall meet the
requirements as provided in Article 6. All investors shall make
relevant modifications in the contract and the articles of
association of the FBIE and report to the examination and approval
organ for archival purposes.
(4) After an FBIE has been established, the investment application
of new investors shall be in conformity with the present Provisions
and the stipulations in the contract, and shall be consented by the
indispensable investors. Relevant modifications shall be made in the
contract and the articles of association of the FBIE and shall be
reported to the examination and approval organ for archival
purposes.
(5) Among the incomes of an FBIE arising from selling or disposing
of the interests of its invested enterprise by other means, the part
equivalent to its original amount of investment may be directly
allocated to all the investors. Such allocation constitutes a
reduction of the invested amount of the investors. An FBIE shall
stipulate concrete methods of allocation in its contract, and at
least 30 days before it makes such allocation, it shall submit an
archival statement on the request of reducing the relevant invested
amount of the investors. In the said statement, it shall prove that
the amount of the investments to be made by the investors and the
other capital it has at that time is at least in conformity with the
investment obligations that the FBIE shall undertake at that time.
However, such allocation shall not be a plea to the litigation
resulted from its violation of any of the investment obligations.
Article 14 When a non-legal-person organization files an application
to the registration authority for modifying its registration, the
archival evidential documents issued by the above-mentioned
examination and approval organ may replace relevant documents for
examination and approval.
Article 15 Having made investments according to the proceedings of
business-starting investments and upon relevant capital verification
report, the investors of the FBIE shall file an application to the
original registration organ for handling the archival procedures for
their investments. The registration organ shall fill up the number
of its actual amount of capital behind the item of "Capital Amount"
on its Business License.
　　Where an FBIE makes no investment or fails to make the total
investment, it shall be subject to penalties imposed by the
registration organ in accordance with the existing regulations.
Article 16 The investors of an FBIE shall make investments and
relevant modifications in accordance with the existing regulations.
Chapter IV Institutional Structure
Article 17 An FBIE in the form of non-legal-person organization
shall establish a joint management committee. An FBIE in the form of
company shall establish a board of directors. The investors shall
stipulate on how to organize the joint management committee or the
board of directors in the contract and in the articles of
association of the FBIE. The joint management committee and the
board of directors shall manage the enterprise on behalf of its
investors.
Article 18 The subordinate administrative departments of the joint
management committee and the board of directors shall, in accordance
with the power as specified in the contract and the articles of
association of the FBIE, take charge of the routine managerial work
and execute the investment decisions made by the joint management
committee and the board of directors.
Article 19 The person-in-charge of an administrative department
shall satisfy the following conditions:
(1) shall have full capacity for civil conduct;
(2) shall have no record of criminal offence;
(3) shall have no record of bad operations;
(4) shall be experienced in business-starting investments and have
no record of illegal practices.
(5) shall meet the other requirements of the examination and
approval organ.
Article 20 The administrative departments shall regularly report the
following to the joint management committee and the board of
directors:
(1) significant investments under authorization;
(2) metaphase & annual performance reports and financial statements;
(3) other matters as provided in laws and regulations;
(4) relevant matters as stipulated in the contract and in the
articles of association of the FBIE.
Article 21 The joint management committee and the board of directors
may grant the power of routine administration to a
business-investment management enterprise or another FBIE rather
than establish administrative departments. The business-investment
management enterprise may be a domestically-funded business-starting
investment enterprise or a foreign-funded one or an overseas
enterprise. In this case, the business-starting investment
enterprise and the business-starting investment management
enterprise shall conclude a managerial contract, stipulating
respective rights and interests. Such a contract shall not come into
effect until it has been agreed by all the investors and has been
approved by the examination and approval organ.
Article 22 The investors of an FBIE may, by reference to the
international practices, stipulate interior system for income
allocations and incentive mechanism in the business-starting
investment contract.
Chapter V Business-Starting Investment Management Enterprise
Article 23 An entrusted business-starting investment management
enterprise shall meet the following conditions:
(1) To accept the entrustment of the FBIEs and to manage the
investments made by them shall be its main business;
(2) It shall have at least 3 professional managerial persons who
have at least three years of practical experience in
business-starting investment;
(3) Its registered capital or its total investments shall not be
less than 1, 000, 000 yuan or equivalent foreign exchange;
(4) It shall have a perfect interior control system.
Article 24 A business-starting investment management enterprise is
allowed to take the form of the corporate organization or the
partnership organization.
Article 25 A business-starting investment management enterprise may
be entrusted to manage different FBIEs.
Article 26 A business-starting investment management enterprise
shall report the matters as listed in Article 20 to the joint
management committee and the board of directors of the entrusting
party.
Article 27 The establishment of a foreign-funded business-starting
investment management enterprise shall be in conformity with the
conditions as provided in Article 23 and shall be reported to the
examination and approval organ for approval via the administrative
departments of foreign trade and economic cooperation at the
provincial level where the company to be established is located. The
examination and approval organ shall make a written decision on
whether to approve or not within 45 days as of the acceptance of the
complete set of the above-mentioned documents. It shall issue a
Certificate of Approval for Foreign-invested Enterprises to the
approved enterprises, which shall file an application to the
registration organ by holding the Certificate within a month as of
their acceptance of the Certificate.
Article 28 The following documents shall be submitted to the
examination and approval organ in applying for the establishment of
a foreign-invested business-starting investment management company:
(1) establishment application;
(2) contract and articles of association of foreign-funded
business-starting investment management company;
(3) the investors'' registration certificate (photocopy) and the
certificate of the legal representative (photocopy);
(4) relevant documents required by the examination and approval
organ;
Article 29 A foreign-invested business-starting investment
management enterprise shall give a clear indication of "INVESTMENT
MANAGEMENT" in its name. Except for the foreign-invested
business-starting investment management enterprises any other
foreign-funded enterprises shall not do so.
Article 30 An overseas business-starting investment management
enterprise, which has acquired the approval of engaging in
business-starting investment management under the authorization of
FBIEs, shall file an application to the registration organ to handle
the business registration procedures within 30 days as of the
approval day of the management contract.
　　An applicant shall submit the following documents to the business
registration organ and shall be responsible for their authenticity
and effectiveness:
(1) an application for registration signed by the chairman of the
board of directors of the overseas business-starting investment
management enterprise, or by a competent person;
(2) a management contract and the approval documents of the
examination and approval organ;
(3) articles of association or partnership agreement of the overseas
business-starting investment management enterprise;
(4) the overseas business-starting investment management
enterprise'' legal license to do business;
(5) the credit certification of the overseas business-starting
investment management enterprise;
(6) the power of attorney, resume and the certification of the
identification of the person-in-charge of the Chinese project
appointed by the overseas business-starting investment management
enterprise;
(7) the certification of its business offices in China; All of the
aforesaid documents should be written in Chinese, those written in
foreign languages other than Chinese shall be accompanied by good
Chinese translations
Chapter VI Business Management
Article 31 An FBIE may engage in the following businesses:
(1) It may make equity investments with all of its own capital
through establishing new enterprises, or investing into an
established enterprise, or accepting the stock equities transferred
by the investors of an established enterprise, or through other
means as permitted in the laws and regulations of the state;
(2) It may offer business-starting investment consultancy services;
(3) It may offer management consultancy to the invested enterprises;
(4) It may engage in other businesses as approved by the examination
and approval organ. The capital of an FBIE may be largely used to
make equity investments into its invested enterprise.
Article 32 A business-starting enterprise shall not engage in the
following activities:
(1) It shall not make investments into the areas in which foreign
investments are prohibited by the state;
(2) It shall not make direct or indirect investments into the listed
securities and bonds of an enterprise, but after the invested
enterprise is listed, the shares held by the FBIE shall be an
exception.
(3) It shall not make direct or indirect investments into real
property not for its own use;
(4) It shall not make investments by way of loans;
(5) It shall not make investments by embezzling the capital not in
its ownership;
(6) It shall not provide a loan or guaranty to others, but the bonds
with a term of more than 1 year issued by its invested enterprise
and the investments in the nature of bonds that may be converted
into equity investments to the invested enterprise shall be excluded
(this paragraph doesn''t concern whether the invested enterprise is
entitled to issue such bonds or not);
(7) It shall not engage in other activities as prohibited in the law
and regulations and the contract of the FBIE.
Article 33 The investors shall stipulate a term for foreign
investments in the contract of the FBIE.
Article 34 The incomes of an FBIE shall be generated largely from
selling the stock equities it holds in the invested enterprise or
from disposing of the stock equities by other means. When an FBIE
sell the stock equities it holds in the invested enterprise or
dispose of the stock equities by other means, it may, in accordance
with the law, choose one of the following available methods of
withdrawing:
(1) It may transfer part of or all of the stock equities it holds to
other investors;
(2) It may sign an agreement of stock equity counter-purchase with
the invested enterprise, which may counter-purchase the stock
equities held by the business-starting investment enterprise under
certain circumstances;
(3) Where the invested enterprise satisfies the conditions of
listing as provided by laws and administrative regulations, it may
apply for listing in the securities markets of home and abroad. In
accordance with the law, the FBIE may transfer the shares it holds
in the invested enterprise through the securities markets;
(4) The other methods that are allowed by the laws and
administrative regulations of China. The concrete regulatory
measures concerning the invested enterprise'' counter-purchase of
the stock equities held by the FBIE shall be separately formulated
by the examination organ jointly with the registration organ.
Article 35 An FBIE shall make tax declaration in accordance with the
tax laws of the state. As to a non-legal-person organization, in
accordance with the law, it may request all the investing parties to
file returns for enterprise income taxes on their own, or file an
application by itself, after the application has been approved, it
shall, in accordance with the law, calculate and pay the enterprise
income tax in a consolidated way.
　　The concrete regulatory measures concerning the levy of enterprise
income tax upon the non-legal-person FBIEs shall be promulgated
separately by the State Administration of Taxation.
Article 36 Where the profit or other income obtained by a foreign
investor from an FBIE is to be remitted abroad, it shall be paid
from the foreign currency account of the FBIE, or shall be remitted
through an entrusted bank with the foreign currencies purchased from
the bank. Such payment or remittance shall be made on the basis of
the allocation decision made by the joint management committee or
the board of directors, the audit report issued by an accountant
office, the certification of inflow of foreign investments and the
report on the verification of capital, the certification of tax
payment and the tax return (where an enterprise enjoys tax
concession, it shall present the evidential documents of tax
concession issued by the tax authorities).
　　In accordance with the law, a foreign investor may request to
purchase foreign currencies to remit the investments withdrawn from
the FBIE. As to an FBIE in the form of company, the opening and
access of foreign currency account, changes of capital and other
matters involving the incomes and expenses of foreign currencies
shall be handled pursuant to the existing regulations concerning the
administration of foreign exchange. But relevant regulations on the
non-legal-person FBIEs shall be formulated separately by the State
Administration of Foreign Exchange.
Article 37 The investors shall stipulate the business term of the
FBIE in the contract and in the articles of association, generally
speaking, the term shall not exceeds 12 years. When the business
term expires, it may be extended upon the approval of the
examination and approval organ.
　　Upon the approval of the examination and approval organ, an FBIE
may be dissolved, terminate the contract and the articles of
association ahead of the schedule. However, if a non-legal-person
organization has sold out all the investments or sold them off by
other means, have paid off all its debts and have allocated all the
residual properties to the investors, it may, without being subject
to approval, enter into the dissolving and terminating procedure,
but it shall submit a written explanation for archival purposes to
the examination and approval organ at least 30 days before the
dissolve comes into effect.
　　Where an FBIE is to be dissolved, it shall liquidate in compliance
with pertinent regulations.
Article 38 An FBIE shall file an application to the original
registration organ for deregistration within 30 days as of the
completeness of the liquidation.
　　It shall submit the following documents in applying for the
cancellation and it shall be responsible for their authenticity and
effectiveness:
(1) an application for deregistration signed by the chairman of the
board of directors, or by the person-in-charge of the joint
management committee, or by the person-in-charge of the liquidation
organ;
(2) decision made by the board of directors or the joint management
committee;
(3) liquidation report;
(4) certifications for the cancellation of registration issued by
tax authorities and the custom;
(5) the approving documents or archival documents of the examination
and approval organ;
(6) other documents as required in the laws and administrative
regulations. Where an application for deregistration has been
approved by the registration organ, the FBIE terminates. The joint
liabilities of the indispensable investors of a non-legal-person
organization shall not be immune for the termination of the
enterprise.
Chapter VII Examination and Supervision
Article 39 The domestic investments of an FBIE shall be made by
referring to Rules for Guiding Foreign Investments and the Guiding
Catalogue of Industries for Foreign Investments.
Article 40 Where an FBIE invests in any of the encouraged and
approved enterprises, it shall go through archival procedures at the
entrusted departments of foreign trade and economic cooperation
where the invested enterprise is located. Within 15 days as of the
acceptance of the archival materials, the said entrusted departments
shall complete the examination and issue a Certificate of Approval
for Foreign-invested Enterprise to the invested enterprise, which
shall file an application for registration to the registration organ
upon the Certificate. The registration organ shall decide whether to
approve the registration or not in accordance with relevant laws and
administrative regulations, and it shall issue a Business License of
Foreign Invested Corporate Enterprise to the approved enterprises.
Article 41 Where an FBIE invests in any of the restricted
enterprises, it shall file an application to the provincial
authorities of foreign trade and economic cooperation where the
restricted enterprise is located, and it shall offer the following
materials:
(1) its statement on having sufficient investment funds;
(2) its approval certificate and business license (copies);
(3) the contract and the articles of association of the invested
enterprise signed by the FBIE (and the other investors of the
invested enterprise).
　　Within 45 days as of the acceptance of the above-mentioned
materials, the provincial authorities of foreign trade and economic
cooperation shall make a written reply of approval or disapproval to
the applicant, to whom it shall issue a Certificate of Approval for
Foreign-invested Enterprise. The invested enterprise shall file an
application to the registration organ for registration upon the
approving documents and the Certificate. The registration organ
shall decide whether to approve the registration or not. It shall
issue a Business License of Foreign Invested Corporate Enterprise to
the approved enterprises.
Article 42 Where an FBIE invests into the projects in the area of
service trade that is open to the foreign investors gradually, it
shall be subject to the examination and approval in compliance with
pertinent regulations of the state.
Article 43 To increase or transfer any of its investment into the
invested enterprise, an FIBE shall go through the procedures in
accordance with Articles 40, 41 and 42.
Article 44 An FBIE shall report to the examination and approval
organ for archival purposes as of the completeness of the procedures
of Articles 40 through 43.
Article 45 Moreover, in March every year, an FBIE shall report the
information of fund collection and utilization in the previous year
to the examination and approval organ for archival purposes.
　　Within 5 days as of the acceptance of the archival materials, the
examination and approval organ shall issue a certification of
archival registration, which shall be one of the requisite materials
for an FBIE to accept annual joint examination. Where an enterprise
that fails to follow the above-mentioned procedures, it shall be
subject to the relevant punishment by the examination organ after
discussing with the pertinent department of the State Council.
Article 46 In the registered capital of the enterprise invested by
an FBIE, if the proportion of the actual contributions paid in by a
foreign investor or the proportion of the total contributions paid
in by the foreign investors in the proportion of the FBIE is not
less than 25%, the invested enterprise is entitled to enjoy relevant
preferential treatments granted to foreign-invested enterprises. If
the said proportion is less than 25 %, the invested enterprise shall
not enjoy relevant preferential treatments granted to
foreign-invested enterprises.
Article 47 Where an already established domestically-funded
enterprise with domestic investor (s) of natural person may continue
to keep their status of shareholder(s) after this enterprise has
accepted the investments of an FBIE and has changed into a
foreign-invested enterprise.
Article 48 Where the person-in-charge of the administrative
department of a business-starting investment enterprise or the
person-in-charge of the investment management enterprise has illegal
practices, he shall be held responsible. If the circumstances are
serious, the FIBE shall not continue to engage in business-starting
investments and relevant activities of investment management.
Chapter VIII Supplementary Provisions
Article 49 The present Provisions shall be applicable to the FBIEs
to be established in the mainland by the investors from the Hong
Kong Special Administrative Region, Macao Special Administrative
Region and Taiwan Region.

Article 50 The power to interpret the present Provisions shall
remain with the Ministry of Foreign Trade and Economic Cooperation,
the Ministry of Science and Technology, the State Administration for
Industry and Commerce, the State Administration of Taxation and the
State administration of Foreign Exchange.

Article 51 The present Provisions shall enter into force as of March 1, 2003.
The Interim Provisions on the Establishment of Foreign-Funded
Business-starting Investment Enterprises promulgated by the Ministry
of Foreign Trade and Economic Cooperation, the Ministry of Science
and Technology and the State Administration for Industry and
Commerce on August 28, 2001 shall be abolished on the same day.