Foreign-funded enterprises are independent economic entities, operating independently, accounting independently and bearing legal responsibilities independently. As far as organizational forms are concerned, foreign-funded enterprises can be legal persons or non-legal persons. A foreign-funded enterprise with legal personality has obtained legal personality according to law, and its organizational form is generally a limited liability company. The liability of foreign investors to the enterprise is limited to the amount of their subscribed capital contribution. A foreign-invested enterprise that does not form a legal person organization may take the form of partnership or sole proprietorship. A partnership here refers to an enterprise established in China by two or more foreign legal persons or natural persons with the same capital contribution. A sole proprietorship enterprise refers to an enterprise established by a foreign investor in China according to law, and the foreign investor shall bear unlimited liability for the debts of the enterprise.
Legal basis:
People's Republic of China (PRC) Foreign Investment Law
Article 2 This Law applies to foreign investment in People's Republic of China (PRC). Foreign investment as mentioned in this Law refers to the investment activities directly or indirectly carried out by foreign natural persons, enterprises or other organizations (hereinafter referred to as foreign investors) in China, including the following situations:
(1) Foreign investors set up foreign-invested enterprises in China alone or jointly with other investors;
(two) foreign investors in China to obtain shares, equity, property shares or other similar rights and interests of enterprises;
(3) Foreign investors invest in new projects in China alone or jointly with other investors;
(4) Other investment methods stipulated by laws, administrative regulations or the State Council. Foreign-invested enterprises mentioned in this Law refer to enterprises wholly or partially invested by foreign investors and incorporated in China according to the laws of China.
Article 3 The State adheres to the basic national policy of opening to the outside world and encourages foreign investors to invest in China according to law. The state implements a high-level investment liberalization and facilitation policy, establishes and improves a foreign investment promotion mechanism, and creates a stable, transparent, predictable and fair competition market environment.
Article 4 The State implements the system of national treatment plus negative list management for foreign investment before entry. The pre-entry national treatment mentioned in the preceding paragraph refers to the treatment given to foreign investors and their investments at the stage of investment access that is not lower than that given to domestic investors and their investments; The so-called negative list refers to the special management measures for foreign investment in specific fields stipulated by the state. The state gives national treatment to foreign investment outside the negative list. The negative list is published or approved by the State Council. If the international treaties and agreements concluded or acceded to by People's Republic of China (PRC) have more favorable provisions on the access treatment of foreign investors, they can be implemented in accordance with the relevant provisions.