(Adopted by the Fourth Session of the Sixth National People's Congress on April 12, 1986,and amended by by the 18th Session of the Standing Committee of the 9th National People's Congress on October 31, 2000)

Article 1. In order to expand international economic cooperation and technological exchange and to promote the development of China's national economy, the People's Republic of China permits foreign enterprises and other economic entities or individuals (hereinafter referred to as foreign investors) to establish wholly foreign-owned enterprises within the territory of China and will protect the lawful rights and interests of such enterprises.
Article 2. Wholly foreign-owned enterprises referred to in this Law mean enterprises established within the territory of China in accordance with the relevant laws of China, the entire capital of which is invested by foreign investors. Such enterprises do not include branch offices established by foreign enterprises and other economic entities within the territory of China.
Article 3. The establishment of wholly foreign-owned enterprises must be beneficial to the development of China's national economy. The state encourages to establish such 
enterprises as shall export all or most of their products or adopt advanced technology.
Industries in which the establishment of wholly foreign-owned enterprises is forbidden or restricted by the state shall be stipulated by the State Council.
Article 4. The investment of, the profits obtained by and other lawful rights and interests of foreign investors within the territory of China shall be protected by the laws of China.
Wholly foreign-owned enterprises must observe China's laws and regulations and shall not harm the social and public interests of China.
Article 5. The state will not nationalize or expropriate wholly foreign-owned enterprises. Under special circumstances, the state, based on the need of social and public interests, may expropriate wholly foreign-owned enterprises pursuant to legal procedures and give commensurate compensation.
Article 6. Applications for the establishment of wholly foreign-owned enterprises shall be examined and approved by the department under the State Council in charge of foreign 
economic relations and trade or the authorities authorized by the State Council. The examination and approval authorities shall decide to approve or disapprove within ninety days from the date of receiving the application.
Article 7. After the application for establishing a wholly 
foreign-owned enterprise has been approved, the foreign 
investor shall, within thirty days from the date of receiving 
the approval certificate, apply for registration with the 
administrative authorities for industry and commerce and 
obtain a business license. The date on which the business 
license of a wholly foreign-owned enterprise is issued shall 
be the date such enterprise is established.
Article 8. A wholly foreign-owned enterprise that meets the 
requirements regarding legal persons as stipulated by the laws 
of China shall obtain the status of a Chinese legal person 
according to law.
Article 9. A wholly foreign-owned enterprise shall make the 
investment within the territory of China within the period 
approved by the examination and approval authorities. If no 
investment has been made at the end of the period, the 
administrative authorities for industry and commerce shall 
have the right to revoke its business license.
The administrative authorities for industry and commerce shall 
examine and supervise the investments of wholly foreign-owned 
enterprises.
Article 10. Reorganization, merger or other important changes 
of a wholly foreign-owned enterprise shall be submitted to the 
examination and approval authorities for approval and shall go 
through the procedures of the administrative authorities for 
industry and commerce for changes in the registration.
Article 11. No interference shall be allowed in the operation 
and management activities of a wholly foreign-owned enterprise 
conducted according to its approved articles of association.
Article 12. A wholly foreign-owned enterprise employing 
Chinese staff and workers shall enter into contracts according 
to law and shall specify in the contracts provisions relating 
to matters of employment, dismissal, remuneration, benefits, 
labour protection and labour insurance.
Article 13. The staff and workers of a wholly foreign-owned 
enterprise shall establish a trade union according to law, 
carry on trade union activities and protect the lawful rights 
and interests of the staff and workers.
A wholly foreign-owned enterprise shall provide the necessary 
facilities for the activities of its trade union.
Article 14. A wholly foreign-owned enterprise must keep 
account books within the territory of China, carry out 
independent accounting, submit accounting statements according 
to regulations and accept supervision by the finance and tax 
authorities.
If a wholly foreign-owned enterprise refuses to keep account 
books within the territory of China, the finance and tax 
authorities may impose a fine on the enterprise and the 
administrative authorities for industry and commerce may order 
it to stop its business operations or revoke its business 
license.
Article 15. Supplies such as raw materials and fuel needed by 
a wholly foreign-owned enterprise within the approved scope of 
business may be purchased in China or on the international 
market. 
Article 16. All items of insurance of a wholly foreign-owned 
enterprise shall be insured with insurance companies within 
the territory of China.
Article 17. A wholly foreign-owned enterprise shall pay taxes 
in accordance with the relevant tax regulations of the state 
and may enjoy preferential treatment in tax reductions and 
exemptions.
If a wholly foreign-owned enterprise reinvests its after-tax 
profits within the territory of China, it may apply for a 
refund of part of the income tax already paid on the 
reinvested amount in accordance with the regulations of the 
state.
Article 18. The foreign exchange matters of wholly 
foreign-owned enterprises shall be handled in accordance with 
the foreign exchange control regulations of the state.
A wholly foreign-owned enterprise shall open an account with 
the Bank of China or another bank designated by state foreign 
exchange control authorities. A wholly foreign-owned 
enterprise shall resolve the balance between its foreign 
exchange income and expenditure by itself.
Article 19. The lawful profits and other lawful income 
obtained by foreign investors from wholly foreign-owned 
enterprises and the funds they receive after liquidation may 
be remitted abroad.
Salaries and other lawful income of foreign staff and workers 
of wholly foreign-owned enterprises may be remitted abroad 
after payment of individual income tax according to law.
Article 20. The term of operation of a wholly foreign-owned enterprise shall be submitted by the foreign investors and approved by the examination and approval authorities. If an extension is needed upon the expiration of the term, an 
application shall be filed 180 days prior to the expiration of the term with the examination and approval authorities, which shall decide to approve or disapprove within 30 days from the date of receiving the application.
Article 21. When a wholly foreign-owned enterprise terminates, a prompt public announcement shall be made and liquidation shall be conducted in accordance with legal procedures.
Prior to the completion of the liquidation, the foreign investors shall not dispose of the assets of the enterprise except for carrying out the liquidation.
Article 22. When a wholly foreign-owned enterprise terminates, it shall go through the procedures for cancelling its registration with the administrative authorities for industry and commerce and return its business license.
Article 23. The department under the State Council in charge of foreign economic relations and trade shall, on the basis of this Law, formulate detailed rules for implementation which shall come into force after being submitted to and approved by 
the State Council.
Article 24. This Law shall come into force on the date of promulgation.