Foreign investment refers to the private direct investment of foreign companies, companies, other economic organizations, or individuals within the territory of the People’s Republic of China by the provisions of the laws of the People’s Republic of China. The subject of foreign investment is “foreign entrepreneurs”, also known as “foreign investors”. The emphasis here is on foreign nationality, including companies, corporations, and other economic organizations established outside of China and by the relevant laws of other countries. , and foreign nationals Apart from historical, political, legal, and other reasons, foreign investors also include investors from the Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan.
Advantages of foreign investment companies:
1. Develop multinational business and enhance corporate image.
2. Facilitate international trade and avoid tariff bastions.
3. Avoid foreign exchange management and facilitate capital entry.
4. Independently and freely carry out the parent company’s global strategy without considering the Chinese investor factor.
5. Ability to conduct business formally without the many restrictions of a representative office.
6. Intellectual property protection, proprietary technology.
7. No need for profit sharing with other parties, and more efficient in operation, management, and future development.
8. Pure foreign companies can apply for China and Hong Kong license plates, which is very convenient for friends who frequently travel between the mainland and Hong Kong
There are two types of foreign investment companies:
1. Pure Foreign Investment: There are two cases, one is that the foreign investor is a natural person and occupies all the shares of the company, the other is that the foreign investor is a company and occupies all the shares of the company. As of now, most of the mainland listed companies are invested by Hong Kong companies, which are generally called pure foreign companies.
2. Sino-foreign joint ventures: There are also two cases, one is that foreign investors are registered Sino-foreign joint ventures jointly invested and held by mainland individuals and enterprises, and the other is a Sino-foreign joint venture company invested and held by mainland companies and companies.
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