Provisions of the State Council on Encouraging Foreign Investment
Provisions of the State Council on Encouraging Foreign Investment
Provisions of the State Council on Encouraging Foreign Investment
Guo Fa [1986] No.95
October 11, 1986
Article 1 These Provisions are formulated in order to improve the investment environment, facilitate the absorption of foreign investment, introduce advanced technology, upgrade product quality, expand exports in order to generate foreign exchange and develop the national economy.
Article 2 The State encourages foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as "foreign investors") to establish Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign capital enterprises (hereinafter referred to as "enterprises with foreign investment") within the territory of China.The State grants special preferences to the enterprises with foreign investment listed below:(1) Production enterprises whose products are mainly for export, which have a foreign exchange surplus after deducting from their total annual foreign exchange revenues the annual foreign exchange expenditures incurred in production and operation and the foreign exchange needed for the remittance abroad of the profits earned by foreign investors (hereinafter referred to as "product-for-export enterprises").(2) Production enterprises possessing advanced technology supplied by foreign investors which are engaged in developing new products, and upgrading and replacing products in order to increase foreign exchange generated by exports or for import substitution (hereinafter referred to as "technologically advanced enterprises").
Article 3 Product-for-export enterprises and technologically advanced enterprises shall be exempt from payment of all subsidies to be granted by the State to staff and workers, except for the payment of or allocation of funds for labour insurance, welfare costs and housing subsidies for Chinese staff and workers in accordance with the provisions of the state.
Article 4 The site use fees for product-for-export enterprises and technologically advanced enterprises, except for those located in busy urban sectors of large cities, shall be computed and charged according to the following standards:
(1) five to twenty RMB yuan per square metre per year in areas where the development fee and the site use fee are computed and charged together;
(2) not more than three RMB yuan per square metre per year in site areas where the development fee is computed and charged on a one-time basis or areas which are developed by the above-mentioned enterprises themselves.Exemptions for specified periods of time from the fees provided in the foregoing provision may be granted at the discretion of local people's governments.
Article 5 Product-for-export enterprises and technologically advanced enterprises shall be given priority in obtaining water, electricity and transportation services, and communication facilities needed for their production and operation.
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