Foreign Investment Regulations in Hainan Special Economic Zone

Article 43　Foreign investment enterprises will have the right to determine their own business policies and management systems, to determine production, sales and financial plans, to price their products (except for those subject to special regulations of the State), to determine profit distribution plans, and to determine wage scales, forms of wages and award and subsidy regulations, in accordance with their contracts and articles of association. 

Article 44　Foreign investment enterprises must take out all their insurance policies with insurance companies in the Hainan Special Economic zone. Types of insurance that cannot be provided by insurance companies in the Hainan Special Economic Zone may be taken out from insurance companies outside the Hainan Special Economic Zone. 

Article 45　Foreign investment enterprises may issue bonds upon approval by the head office or Hainan branch of the People's Bank of China. Foreign investment enterprises that are companies limited by shares may issue shares upon approval by the head office or Hainan branch of the People's Bank of China. The specific measures for such issues of bonds and shares will be formulated separately. 

Article 46　Foreign investment enterprises must draw up accounting books, conduct independent accounting and submit accounting statements to the relevant departments in accordance with the relevant regulations of the State.

Foreign investment enterprises should submit statistical statements to the relevant departments in accordance with the relevant regulations of the State. 

Article 47　Foreign investment enterprises shall be subject to supervision and inspection by the relevant departments of the local governments in such matters as taxation, environmental protection, labor protection, sanitation, anti-epidemic measures and production safety. 

Part eight　Investment protection

Article 48　The investments, assets purchased, intellectual property, investment profits and other lawful rights and interests in the Hainan Special Economic Zone of foreign business entities shall be protected under the laws of the State and may be assigned and succeeded to according to law. 

Article 49　Investments and other assets of foreign business entities must not be nationalized or expropriated. Under special circumstances, foreign investment enterprises may be expropriated in accordance with the legal procedures if the public interest requires it to be so, in which case appropriate compensation will be provided. Where the PRC has concluded investment protection agreements with the relevant foreign governments, matters shall be handled pursuant to such agreements. 

Article 50　No department or unit may charge fees from foreign investment enterprises other than, or levy fees at rates higher than, those expressly provided for by the State and the Hainan Provincial People's Government. Foreign investment enterprises will have the right to refuse to be apportioned payment of any unreasonable expenses. 

Article 51　Foreign business entities must have recourse to the Chinese courts if their investments or other lawful rights and interests are unlawfully infringed. 

Part nine　Settlement of disputes 

Article 52　Disputes between the parties to Sino-foreign equity joint ventures and Sino-foreign co-operative joint ventures over the interpretation or implementation of their agreements, contracts or Articles of association may be settled through consultation between the parties or through mediation by third parties. 

Where a party does not wish to attempt to settle the dispute through consultation or mediation or if consultation or mediation is unsuccessful, the dispute may be submitted to a Chinese arbitration institution or another arbitration institution for arbitration, on the basis of the arbitration clause of the contract or a written arbitration agreement reached subsequently. 

Where neither of the parties include an arbitration clause in their contract nor subsequently reach a written arbitration agreement, any party may institute proceedings in the Chinese court. 

Article 53　Disputes among foreign investment enterprises themselves and between foreign investment enterprises and domestic enterprises must be handled in accordance with the relevant laws and regulations of the PRC and the local regulations of Hainan province.

Part ten　Supplementary provisions

Article 54　Matters concerning investment in the Hainan Special Economic Zone by companies, enterprises, other economic organizations or individuals from Taiwan, Hongkong and Macao and by overseas Chinese must all be handled by reference to these regulations. 

Article 55　The Hainan Provincial People's Government may formulate implementing measures for these Regulations. 

Article 56　The Hainan Provincial People's Government must be responsible for interpreting these regulations in the event of problems in their application to specific situations. 

Article 57　These regulations must be implemented as of the date of promulgation

(This English version is only for reference. To learn more, please refer to the authoritative Chinese version.)