Investment Opportunities in China
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By China
- China has signed bilateral agreements for investments with several countries.
To see the list of the countries, click here.
To see the conventions, click here.
- International Controversies Registered By UNCTAD
- Organizations Offering Their Assistance in Case of Disagreement
- CIETAC , The International Commission of Economic and Commercial Arbitrage
ICSID , International Center for settlement of Investment Disputes
- Member of the Multilateral Investment Guarantee Agency
- China is a signatory of the Convention of MIGA.
Country Comparison For the Protection of Investors
|China||East Asia & Pacific||United States||Germany|
|Index of Transaction Transparency*||10.0||5.2||7.0||5.0|
|Index of Manager’s Responsibility**||1.0||4.5||9.0||5.0|
|Index of Shareholders’ Power***||4.0||6.3||9.0||5.0|
|Index of Investor Protection****||5.0||5.3||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Varies according to the sector. Necessity to submit its 'business plan' for prior approval to setting up.
- Acquisition of Holdings
- The acquisition of majority interest in a local company is authorized in China according to the sectors.
- Obligation to Declare
- The agency for promotion of foreign investments in the country facilitates getting information on authorizations necessary for setting up.
- Requests For Specific Authorizations
- Necessity for all projects to submit a business plan subject to approval by competent authorities.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
- Rental and Business center. Purchase by foreign companies is subject to restrictions.
- high technology
- The Possibility of Buying Land and Industrial and Commercial Buildings
- Not possible to buy land in China. Only a right of use of 50 to 70 years can be approved.
- Risk of Expropriation
- The risk of expropriation is high. The law envisages a compensation but no indication is given on the amount or its calculation.
- Forms of Aid
- Foreign investors enjoy corporation tax reductions, exemption of tax on dividends repatriated during a period and other tax advantages
The Ministry for Foreign Trade and Economic Cooperation (MOFTEC) can be contacted for any information concerning opportunities in China.
- Privileged Domains
- China especially encourages overseas investments in high technology, appropriate energies and the sectors with export oriented activities.
- Privileged Geographical Zones
- The government has created various zones, granting each tax exemptions or tax incentives to attract overseas investments. They are primarily the 5 special economic zones and the 14 coastal cities.
The special zones are Shenzhen (at the border of Hong-Kong), Zhuhaï (close to Macau), Shantou, Xiamen (vis-à-vis Taiwan) and the island of Hainan. They were selected because they were completely under-developed.
Les 14 coastal cities are Dalian (in the province of Liaonong), Shanghai, Ningbo, Wenzhou (in the province of Zhejiang), Fuzhou (in the province of Fujian), Guangzhou, Zhanjiang (in the province of Guangdong), Beihai (in the autonomous region of Guangxi Zhuang), Tianjin, Yantai, Qingdao (in the province of Shandong) and Lianyungang, Nantong (in the province of Jiangsu). Since a few years, other cities are also regarded as coastal towns profiting from the same status. Unlike the 5 special zones, which were not underdeveloped, but key industrial centers in China. Overseas investments made it possible to improve the infrastructures and create new, more advanced ones.
- Free Zones
- 3 Free zones also exist in Shanghai, Tianjin and Shenzhen where imports are free of all customs duties and taxes provided no goods produced inside the zone are resold on the local market. Bonded warehouses, trading companies and production intended for export are authorized there. In addition 2 other zones exist in the same regions (Export Processing Zones) also enjoying exemptions from customs duties, but in which trade activity is not authorised.
- The Key Sectors of the National Economy
- Agriculture, breeding, forestry and fishing, extraction, manufacture and services.
- High Potential Sectors
- Chemical industry, insurance and bank, high technology, renewable energy, environment.
- Privatization Programs
- Tenders, Projects and Public Procurement
- Chinabidding, Tenders in China
Tenders Info, Tenders in China
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- - weapons
- high- technology
- water supply
- electricity distribution
- Sectors in Decline
- The manufacturing sector with low added-value suffers from rising prices of transport and competition of the other Asian countries (e.g. Vietnam). These products are less competitive.
Finding Assistance For Further Information
- Investment Aid Agency
- Invest in China
- Other Useful Resources
- The heading dedicated to business opportunities of the Chinese agency for international investors
- Doing Business Guides
- Le "International Tax and Business Guide" of Deloitte on China
China Commercial Guide 2010 - Buy USA
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