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Law of the People’s Republic of China on Protection of Investment by Compatriots from Taiwan

Article 1 This Law is formulated to protect and encourage investment by compatriots from Taiwan, and promote the economic development on both sides of the Straits.

Article 2 Investment by compatriots from Taiwan shall apply this Law. Not being covered in this Law, the provisions concerning investment by compatriots from Taiwan in other laws or regulations, if there are, shall be applicable.

In this Law, investment by compatriots from Taiwan means investment made by corporations, enterprises, other economic organizations or individuals as investors from Taiwan region, in other provinces, autonomous regions or municipalities directly under the Central Government.

Article 3 The State shall protect according to law the investment by investors from Taiwan, the profits gained from their investment and other lawful rights and interests.

For making investment, compatriots from Taiwan must comply with laws and regulations of the State.

Article 4 The State shall not nationalize or requisition investment by investors from Taiwan. Under special circumstances, when public interests require, investment by investors from Taiwan may be requisitioned by following legal procedures and appropriate compensation shall be made.

Article 5 The property, industrial property invested by investors from Taiwan, the profits gained from their investment and other lawful rights and interests may be transferred and inherited according to law.

Article 6 Investors from Taiwan may make their investment in convertible currencies, machinery and equipment or other material objects, or industrial property or non-patent technology, etc.

Investors from Taiwan may make further investment with the profits gained from their former investment.

Article 7 Investors from Taiwan may make their investments in form of equity joint venture, contractual joint venture or enterprise with the capital wholly owned by investors from Taiwan (hereinafter referred to as "Taiwan investment enterprises"), or in any other form provided for by laws or regulations.

The establishment of Taiwan investment enterprises shall conform to the industrial policy of the State, and shall be advantageous to development of the national economy.

Article 8 For establishing a Taiwan investment enterprise, one shall apply to the department or the local people’s government specified by the State Council for approval, and having received the application, the examining organ shall decide to approve or disapprove within 45 days after receiving the complete application.

If approved, the applicant shall, within 30 days after receiving the approval, apply for registration to the authorities for enterprise registration according law, and acquire a business license accordingly.

Article 9 Taiwan investment enterprises shall conduct their operational and managerial activities in accordance with laws, regulations and contracts or rules approved by the examination and approval authorities, and their decision-making power for business operations and management shall not be interfered with.

Article 10 In areas where Taiwan investment enterprises are concentrated, associations of Taiwan investment enterprises may be established according to law, and their lawful rights and interests shall be protected according to law.

Article 11 The lawful profits gained by investors from Taiwan from their investment, their other lawful incomes and their assets after liquidation may be remitted to Taiwan or abroad according to law.

Article 12 Investors from Taiwan may appoint their relatives or friends as their investing agents.

Article 13 Taiwan investment enterprises shall enjoy the preferential treatment according to the relevant provisions made by the State Council concerning encouraging investment by compatriots from Taiwan.

Article 14 As for any investment-related dispute arising between an investor from Taiwan and a corporation, enterprise, other economic organization or individual of other province, autonomous region or municipality directly under the Central Government, the parties concerned may settle it through consultation or mediation.

Where any party concerned is unwilling to settle the dispute through consultation or mediation or the consultation or mediation has failed, the dispute may, according to the arbitration clause in the contract or to the written arbitration agreement reached by the parties concerned after the dispute has arisen, be submitted to arbitration.

Where the parties have not concluded an arbitration clause in the contract, nor reached an written arbitration agreement after the dispute has arisen, any of them may bring a suit before a people’s court.

Article 15 This law shall enter into force as of the date of promulgation.