Laws of the People's Republic of China

    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 become effective on the date of promulgation.