Foreign Investment Regulations in Hainan Special Economic Zone

Part one　General provisions 

Article 1　These regulations are formulated in accordance to the relevant laws and regulations of the PRC and the specific circumstances of the Hainan Special Economic Zone, in order to attract foreign investment and accelerate the development of the Hainan Special Economic Zone. 

Article 2　For the purposes of these regulations, the term "foreign business entities" will refer to foreign companies, enterprises, other economic entities or individuals that invest in the Hainan Special Economic Zone. 

Article 3　Foreign business entities are encouraged to invest in and develop in Hainan Island and establish all types of economic and social projects. 

Article 4　Hainan province protects the lawful rights and interests of foreign business entities according to the law.

Article 5　All activities of foreign business entities must comply with the laws and regulations of the PRC and the local regulations of Hainan province. 

Article 6　The administrative department of Hainan province in charge of economic cooperation will be the authority in charge of foreign investment in the Hainan Special Economic Zone. 

Article 7　The forms of capital contribution provided for in the regulations include the following: 

1. Freely convertible foreign currencies; 

2. Renminbi profits derived by foreign business entities from Sino-foreign equity joint ventures, Sino-foreign co-operative joint ventures and wholly foreign-owned enterprises established in the PRC; 

3. Machinery, equipment, raw materials and other materials;

4. Leaseholds, and the structures on such lands, that may be used as co-operation conditions pursuant to the Hainan Special Economic Zone, Granting and Assigning Leaseholds for Value Regulations; 

5. Industrial property and proprietary technology. 

Article 8　The methods of investment provided for in the regulations include: 

1. Establishment of Sino-foreign equity joint ventures, Sino-foreign co-operative joint ventures and wholly foreign-owned enterprises (hereafter, "foreign investment enterprises"), and of other types of enterprises permitted by law; 

2. engaging in compensation trade, processing and assembly of supplied materials and co-operative production; 

3. participating in and buying existing enterprises;

4. purchasing negotiable securities such as stocks and bonds; 

5. obtaining leaseholds according to law, and developing and engaging in business relating to large tracts of land; 

6. other current international methods of investment. 

Part two　Establishment and registration of enterprises 

Article 9　Unless the State provides otherwise, the establishment of foreign investment enterprises in the Hainan Special Economic Zone must be examined and approved by the administrative department of Hainan province in charge of economic cooperation and the agency authorized by the Hainan Provincial People's Government (hereafter, collectively referred to as the "examination and approval authorities"). Approval certificates must be issued by the administrative department of Hainan province in charge of economic cooperation.