Build-operate-transfer (BOT) is a form o project financing applicable to foreign investors undertaking industrial or infrastructure projects in China. It generally requires them to finance, design, construct and operate a facility for a specified period, and then transfer the title of the project to the Chinese government upon expiry of the contract term. BOT is most often used for projects in the fields of power generation, highway construction and wastewater treatment. Foreign investors are entitled to any proceeds from the operation of the project. They are allowed to charge facility users appropriate tolls, fees, rental or charges stated in the relevant contract to enable them to recover their investment, as well as operating and maintenance expenses.
Other forms of business activity
In addition to the investment vehicles described above, there are other forms of doing business that allow participation in China’s economy. These include processing and assembling, leasing and compensation trade (a form of countertrade in which an incoming investment is repaid from the revenues generated by that investment). Contractual arrangements for these types of business do not necessarily require establishing a business entity in China.