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Beijing's Foreign Investment Policies Q & A

Attracted by the continual improvements in China’s socio-economic development, particularly its strong economic performance, more foreign investors are eyeing China, and particularly Beijing, to target their investments.

Still, foreign investors can easily get confused and frustrated while adapting to Beijing’s foreign investment policies, rules and regulations, so Business Beijing, in cooperation with the Beijing Municipal Development and Reform Commission, is beginning this Q&A column to serve foreign investors.

If you have any questions about investing in Beijing please write us via e-mail at: invest@btmbeijing.com or fax at +86 10 6715 2381, we will find someone authoritative to provide you with the best and latest information available. Please remember: only e-mails and faxes are acceptable.

Q: We are a foreign enterprise that has filed a Confirmation Letter of Domestic or Foreign Invested Project Encouraged by the State. Our project is a long-term project, and exchange rates have changed greatly. So when our equipment arrived, our quota for foreign exchange exceeded the amount specified in our confirmation letter. What can we do to resolve this issue?

A: Since the foreign exchange quote deficiency occurred because of exchange rate fluctuations, the Beijing Municipal Commission of Development and Reform will not alter the confirmation letter. Please consult the sixth chapter of the Notice of the General Administration of Customs on Clarifying Some Issues in the Execution of Tax Reduction and Exemption Policies (No. 172 [2003] of the General Administration of Customs), “The quota of foreign exchange use specified in the Confirmation Letter of Domestic or Foreign Invested Project Encouraged by the State is in a currency different from that used in the actual import transaction, and where the actual prices of the imported goods exceed, as a result of the change of exchange rate, the quota of foreign exchange use that has been put on record for tax exemption or reduction, the customs office may adjust the quota according to the exchange rate at the time of conclusion of the contract. Other projects of tax exemption and reduction may also be handled according to this principle.”

Q: We are an “encouraged” foreign-funded enterprise established at the end of 2006 according to the Catalogue for the Guidance of Foreign Investment Industries (Amended in 2004), but we found that some items that operated in our company are listed in the banned category in the Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007). How will the new industrial items influence on our company?

A: For items listed in the banned category in the 2007 Catalogue that already exist and are still being used in the operations of foreign-funded enterprises, the policy will refer to the original policy when the items were verified and approved. From the practice of the 2007 Catalogue, all the items referred to the banned categories during the capital increase, stock rights transfer or the domestic enterprises to the overseas listing of the old enterprises should practice the regulations of 2007 catalogue.

Q: According to Item 3 of Article 2 of Category 3 in the Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007), the production of natural food additives and ingredients by joint venture and cooperative enterprises should be encouraged. But ours is a solely foreign-funded company producing natural food additives. Which category does our company belong to, the permitted, limited or banned?

A: According to the Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007), the natural food additive and ingredient companies that were established by joint venture or in the cooperative manner belong to “encouraged” category. If a company was established in other ways but does not belong to the limited or banned categories, it will be treated as with the permitted category.

Q: To establish a special purpose company, should we go to the Beijing Municipal Commission of Development and Reform to get approval or not?

A: The Interim Implementation Measures of Beijing Municipality for the Examination and Approval of Overseas Investment Projects (No. 2667 [2005] of the Beijing Municipal Commission of Development and Reform) is practiced with all legal persons (hereinafter the investment entity) registered with the Beijing Administrative Division. This includes their overseas holding companies or organizations. Investment in overseas countries and regions (including new establishments, mergers, joint stock, capital increase and re-investment) should seek the approval of the Beijing Municipal Commission of Development and Reform first, and then begin to process the other procedures in the business department and foreign exchange management department.

随着中国社会经济各方面的持续进步，特别是强劲的经济增长，越来越多的外国投资者被吸引到中国来。而北京作为首都，更是成为众多投资者的理想目标。然而，对于初来乍到的外国投资者来说，国内对于外资的各项政策却常常让他们感到困惑。因此，本刊和北京市发展改革委员会合作，开辟了“投资问答”栏目，对外资企业提出的问题给与解答。

如果你对于在北京进行投资有任何问题的话，请通过电子邮件或传真与本刊编辑部联系。

邮箱：invest@beijing.com

传真：＋86 10 6715 2381

1．我们是一家外资企业，已经在北京市发展和改革委员会办理了《国家鼓励发展的内外资项目确认书》。由于项目建设期较长，汇率变动很大，导致设备到港后用汇额已经超出确认书的额度，请问我应该如何办理变更手续？

答：此类由于汇率发生变化导致的项目用汇额不足的项目，发改委无需进行项目确认书变更，请参照海关总署《海关总署关于明确减免税政策执行中若干问题的通知》（署税发[2003]172号）中第六章：“《国家鼓励发展的内外资项目确认书》的用汇额度与实际进口成交币种不同，由于汇率变化引起进口货物的实际价格折算后超出减免税备案用汇额度的，海关可根据合同鉴定时的汇率调整用汇额度。其它减免税项目也可按此原则办理。”

2．我们是一家2006年底按照《外商投资产业指导目录（2004年修订）》设立的鼓励类外商投资企业，但是我们发现新发布的《外商投资产业指导目录（2007年修订）》中我公司进行的项目已经被列入禁止类，请问新的产业条目对我公司有何影响？

答：对此次在《目录》中新增列为禁止类的项目，如目前已经存在并运营的外商投资企业，执行项目核准时的政策。新《目录》实施后，原有老企业的增资、股权转让或境内企业境外上市等，凡涉及新增禁止类领域，须按照新《目录》的规定执行。

3．我们是一家外商独资企业，生产天然食品添加剂。新的《外商投资项目产业指导目录（2007修订）》中，鼓励类第三类第二条第三项为“天然食品添加剂、食品配料生产(限于合资、合作) ”，请问我公司是属于允许类、限制类、还是禁止类？

答：根据《外商投资产业指导目录（2007年修订）》文件规定，天然食品添加剂、食品配料生产类企业以合资、合作的方式成立，才能属于鼓励类项目。如果以其它方式成立，且不在限制类、禁止类范畴内，将视为允许类。

4．在境外设立特殊目的公司，是否需要先到发改委进行核准？

答：按照《北京市境外投资项目核准暂行实施办法》（京发改〔2005〕2667号），适用于在北京市行政区域内注册的各类法人（以下称“投资主体”）及其通过在境外控股的企业或机构，在境外的国家和地区进行投资（含新建、购并、参股、增资、再投资）项目的核准，应先在发改委进行项目核准后再去商务部门、外汇管理部门办理相应手续。