In order to create favorable investment environment and to encourage overseas firms to invest in China, since the year of 1979 the Chinese government has been gradually setting up a relatively complete legal system, and constituted a foreign investment policy system, which mainly includes industrial policies, regional policies, regional policies, tax policies and financial polices.

1.Legal Frameworks
The main laws and regulations for foreign investments in china include:
1.1Major foreign investment laws and regulations
a)The law of P.R, C on Chinese-Foreign Equity Joint Ventures and its implementation regulations;
b)The law of P.R, C on Chinese-Foreign Contractual Joint Ventures and its implementation regulations;
c)The law of P.R, C on Wholly Foreign-Owned Enterprise and its implementation regulations;
d)The law of P.R, C on Foreign-invested enterprises, the income tax and its implementation regulations;
e)Provisions on Guiding Foreign Investment Direction;
Industrial Catalogue Foreign Investment;
Catalogue of Advantageous Sectors for Foreign Investment in Central and Western Regions;
f)The law of P.R, C on the Protection Taiwan Compatriots’ Investment.
(Notes: the related laws and regulations also apply to the investments from Hong Kong, Macao and Taiwan in China mainland.)

2. General Laws and Regulations
a)The Company Law of the People’s Republic of China;
b)The Contract of the People’s Republic of China;
c)The Insurance Law of the People’s Republic of China;
d)The Arbitration Law of he People’s Republic of China;
e)The Labor Law of the People’s Republic of China;
f)Provisional Regulations of the People’s Republic of China on Value-Added Tax;
g)Provisional Regulations of the People’s Republic of China on Consumption Tax;
h)Provisional Regulations of the People’s Republic of China on Business Tax;

3. International Treaties
(1) Bilateral Investment Treaties
(2) Bilateral Agreement on the
Avoidance of Double Taxation