Law of the People's Republic of China on the Protection of Investment of Taiwan Compatriots

(Adopted at the 6th Meeting of the Standing Committee of the Eighth National People's Congress on March 5, 1994, amended for the first time in accordance with the Decision on Amending the Law of the People's Republic of China on Foreign-Capital Enterprises and Other Three Laws adopted at the 22nd Meeting of the Standing Committee of the Twelfth National People's Congress on Sept 3, 2016, and amended for the second time in accordance with the Decision of the Standing Committee of the National People's Congress on Amending the Law of the People's Republic of China on the Protection of Investment of Taiwan Compatriots adopted on Dec 28, 2019)

Article 1   This Law is enacted for the purpose of protecting and encouraging investment of Taiwan compatriots, and promoting the economic development on both sides of the Straits.

Article 2   Investment of Taiwan compatriots shall be governed by this Law. In respect of matters concerning investment of Taiwan compatriots not covered by this Law, where there are provisions thereon in other relevant laws and administrative regulations of the State, such provisions shall apply.

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

Article 3   The State shall, according to law, protect the investments, investment returns and other lawful rights and interests of investors who are Taiwan compatriots.

Taiwan compatriots in making investment must abide by laws and regulations of the State.

Article 4   The State shall not nationalize or requisition the investment made by investors who are Taiwan compatriots; under special circumstances and on the basis of the need of public interests, the State may, in accordance with legal procedures, requisition the investments made by investors who are Taiwan compatriots and make appropriate compensations thereto.

Article 5   The invested properties, industrial property rights, investment returns and other lawful rights and interests of investors who are Taiwan compatriots may be transferred and inherited according to law.

Article 6   Investors who are Taiwan compatriots may make investment with convertible currency, machinery equipment or other physical assets, industrial property rights or non-patented technologies, etc.

Investors who are Taiwan compatriots may make reinvestment with the returns derived from their investment.

Article 7   Taiwan compatriots may make investment by establishing enterprises with all or part of capital invested by Taiwan compatriots (hereinafter referred to as enterprises with investment of Taiwan compatriots), or may invest in other forms as provided by laws, administrative regulations or other provisions of the State Council.

The establishment of enterprises with investment of Taiwan compatriots shall be in conformity with the industrial policy of the State and conducive to the development of the national economy.

Article 8   Enterprises with investment of Taiwan compatriots shall carry out their activities of operation and management in accordance with law, and their decision-making power in operation and management shall be free from interference.

Article 9   In areas where enterprises with investment of Taiwan compatriots are located in compact forms, an association of enterprises with investment of Taiwan compatriots may be established according to law and its lawful rights and interests shall be protected by law.

Article 10   Investors who are Taiwan compatriots may remit in accordance with law their legal returns from investment, other lawful earnings and funds after settlement of accounts back to Taiwan or outside of the territory of the People's Republic of China.

Article 11   Investors who are Taiwan compatriots may entrust their relatives or friends to act as agents for their investment.

Article 12   Enterprises with investment of Taiwan compatriots shall enjoy preferential treatment in accordance with the relevant provisions of the State Council on encouraging investment of Taiwan compatriots.

Article 13   With respect to disputes over investment arising between investors who are Taiwan compatriots and companies, enterprises, other economic organizations or individuals in other provinces, autonomous regions or municipalities directly under the Central Government, the parties concerned may settle such disputes through consultation or mediation.

Where the parties concerned are not willing to resort to consultation or mediation, or where consultation or mediation proves unsuccessful, they may, in accordance with the arbitration clause in the contract or the written arbitration agreement reached subsequently, submit the matter to an arbitration organ for arbitration.

Where there is no arbitration clause in the contract, and no written arbitration agreement reached subsequently, the parties concerned may bring a lawsuit to the people's court.

Article 14   This Law shall go into effect as of the date of promulgation.