Category: Doing Business In China

 

Source: The State Council – The People’s Republic of China

Foreign direct investment refers to the activity where residents in one country set up a business in another country, or residents of one country acquire major stake and managing shares of an enterprise in another country, with general benchmark of the purchase being at least of 10 percent.

Foreign direct investment does not include the following activities: licensing, subcontract and security portfolio investment, because they do not involve large amount of equity capital, or a significant shift in terms of foreign management control.

Reinvestment refers to any increase in a foreign investor’s shares to the existing investment, including reinvestments on profits and inflows of new capital.

Foreign investors can be either an individual, or a company; its investment can be either wholly foreign-funded, or from a foreign and domestic joint venture.

More Doing Business In China: Registration of foreign-funded companies in China

Source: The State Council – The People’s Republic of China

Investment promotion refers a series of activities that governments adopt to attract foreign direct investment.

Investment promotion includes the following specific types of activities: advertising, direct mail, investment seminars, investment group, participating in the industry fair and exhibition, distributing materials, one-to-one direct marketing, preparing agenda for potential investors, facilitate interaction between potential investors and local partners, acquiring licenses and approval documents from the various government agencies, preparing project proposals, conducting feasibility study, and providing services to investors after the project begins to operate and so on.

Investment promotion does not include offering incentives to foreign investors, screening foreign investment or negotiating with foreign investors, although many organizations that are responsible for carrying out investment promotion activities also carry out these kinds of activities.

More Doing Business In China: Modification registration of foreign-funded enterprises in China