If the proportion of foreign investors' contribution to the registered capital of a foreign-invested enterprise established after the merger is less than 25%, the enterprise shall not enjoy the treatment of a foreign-invested enterprise unless otherwise stipulated by laws and administrative regulations, and its borrowing of foreign debts shall be handled in accordance with the relevant provisions on borrowing foreign debts by domestic non-foreign-invested enterprises. The examination and approval authority issued a certificate of approval for a foreign-invested enterprise with the words "the proportion of foreign investment is less than 25%" (hereinafter referred to as the "certificate of approval"). The registration administration and the foreign exchange administration respectively issue business licenses and foreign exchange registration certificates with the words "the proportion of foreign investment is less than 25%" to foreign-invested enterprises.
Domestic companies, enterprises or natural persons do not enjoy the treatment of foreign-invested enterprises when they merge with domestic companies and foreign-invested enterprises established by their affiliates in the name of companies legally established or controlled overseas, except that foreign companies subscribe for capital increase from domestic companies or foreign companies increase capital from enterprises established after the merger, and the capital increase accounts for more than 25% of the registered capital of established enterprises. A foreign-invested enterprise established in this way shall enjoy the treatment of a foreign-invested enterprise if the proportion of foreign investors other than the actual controller in the registered capital of the enterprise is higher than 25%.