The Peoples Republic of Chinas Law for the Protection of Investments from Taiwan Compatriots
The protection of investments from Taiwan compatriots is critical to China’s economic and social development. As such, the Peoples Republic of China enacted the Law for the Protection of Investments from Taiwan Compatriots on August 31, 2008. This law recognizes Taiwan’s role as a significant source of capital and resources for China’s development and provides legal protections for the investments of Taiwan compatriots.
The law regulates both coastal and inland investments. It applies to all enterprises, including joint ventures, wholly foreign-owned enterprises, and joint operation or cooperative ventures between mainland and Taiwan businesses. It also applies to investments made by persons in Taiwan, including those made through brokers, banks, and other intermediaries. The law also applies to investments in real estate, securities, insurance, and other financial instruments.
The law stipulates that all investments must meet the requirements of the Peoples Republic of China’s (PRC) policies on foreign investment, with the necessary approval and review procedures. Any exercise of acts of unfair competition, the infringement of intellectual property rights, or other illegal activities in relation to the investment will be subject to a criminal penalty.
The law also provides protection of land use rights and other rights associated with the investment projects, with property reasonably seized or possessed by the state as a guarantee. The law also protects the interests of Taiwan compatriots as creditors, encouraging the collection of overdue debts owing to Taiwan compatriots and prohibiting unreasonable demands for repayment or the termination of contracts. It further stipulates procedures for the resolution of disputes between Taiwan compatriots and PRC enterprises or organizations.
The law also offers numerous benefits to Taiwan compatriots who travel to mainland China to engage in business activities. Specifically, it provides for the preferential granting of visas for business activities, the granting of permanent residence permits, and the granting of tax concessions. In addition, the law permits qualified Taiwan investors to participate in certain industries that are typically reserved for mainland investors.
Finally, the law contains provisions for the protection of confidential business information and sets forth the conditions for the repatriation of income and profits generated from Taiwan compatriot investments.
In conclusion, the Law for the Protection of Investments from Taiwan Compatriots is designed to provide investors from Taiwan, and the companies they establish, with a fairer and more stable investment environment. The law seeks to encourage Taiwan compatriot investors to take part in the economic development of mainland China and provides the necessary legal protections and benefits to do so.
