Foreign-invested joint venture (JV) is the enterprise that foreign companies, enterprise and other economic organizations or individuals (hereinafter referred to as “foreign investors”) to establish equity joint venture together with Chinese companies, enterprise and other economic organizations (hereinafter referred to as “Chinese partners”) within the territory of the People's Republic of China, on the principle of equality and subject to approval by the Chinese Government. Both parties to the venture shall share the profits, risks and losses in proportion to their contributions to the registered capital. Remarkably, Chinese individuals are not qualified to invest in the JV. On the other hand, a minimum of 25% of the capital must be contributed by the foreign partner(s). There is no minimum share-holding percentage of investment for the Chinese partner(s). Share holdings in a joint venture are usually non-negotiable and cannot be transferred without approval from the Chinese government. Similarly, investors are restricted from withdrawing registered capital during the existence of the joint venture contract.
There are 2 types of Joint Venture in China:
1- EJV (Equity Joint Venture)
Equity joint ventures are the second most common manner in which foreign companies enter the China market and the preferred manner for cooperation where the Chinese government and Chinese businesses are concerned.
2- CJV (Cooperative Joint Venture)
In a Sino-Foreign Cooperative Venture (also known as Contractual Joint Venture), the parties involved may operate as separate legal entities and bear liabilities independently rather than as a single entity. A cooperative venture may also be registered as a limited liability entity resembling an equity joint venture in operation, structure, and status as a Chinese legal entity.There is no minimum foreign contribution required to initiate a cooperative venture, allowing a foreign company to take part in an enterprise where they preferred to remain a minor shareholder.
After Services for China Joint Venture Setup
TANNET can provide a series of after services to customers, such as open company basic bank account, open tax account, do accounting, annual return service, company alteration, financial planning and so on
The Time Needed to setup joint venture in China
1.For manufacturing enterprise: 30-50 working days will be finished. (Count the time after the approval of environment & fire and the detailed time depends on the operation type)
2. For the trading and service enterprise: 30-50 working days will be finished.(The detailed time depends on the operation type)
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