(The Provisions Concerning the Administration of Foreign-funded Business-starting Investment Enterprises were adopted at the 11th ministerial meeting of the Ministry of Foreign Trade and Economic Cooperation. It is hereby promulgated and shall be implemented as of March 1, 2003.)

Chapter I General Provisions

Article1 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.

Article2 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.

Article3 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.

Article4 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
Article7 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.

Article5 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.

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