Introduction
Equity joint ventures are governed by the Law of the People's
Republic of China on Joint Ventures Using Chinese and Foreign
Investment promulgated in 1979 and last amended in 2002.
The equity joint venture law requires that the foreign partner to
the venture contribute at least 25 percent of the registered
capital. There is usually no upper limit on the foreign partner's
contributions except where Chinese law requires the Chinese partner
to have a minimum ownership (i.e. restricted industries).
Parties may contribute their respective capital to the equity
joint venture in the form of cash, capital goods, industrial
property rights, and other assets. Commonly, the Chinese partner
will contribute cash, land development or clearance fees and land
use rights while the foreign partner commonly contributes cash,
construction materials, technology, equipment and machinery. All
contributions must first be approved by the relevant Chinese
authorities and later certified in a report from a
Chinese-registered CPA firm.
The partners to an equity joint venture have joint management of
the venture. The board of directors, which must comprise of at least
three members, has the authority to make all major decisions
concerning the venture. The joint venture partners are responsible
for appointing the board members, and representation must be in
proportion to each party's respective ownership interest in the
venture. Under the Chinese Joint Venture Law, either party may elect
the chairman. If one side assumes the post of chairman, the other
side will have the right to appoint the vice-chairman. The
procedures for registration are similar to those of a Wholly Foreign
Owned Enterprise (WFOE).
Registered Share Capital
For the equity joint venture enterprises, the registered capital
is required as much as RMB1,000,000 (about USD120,500). In China the
paid-up capital is equal to registered capital, Investors or
shareholders must pay the their shares to the specific bank, which
should be audited by the certified public accountant.
Registration Procedures
Step |
Description |
(1) |
Obtaining the
necessary work permits and resident permits for the legal
representatives, etc. |
(2) |
Obtaining approval and
relevant certificate by Foreign Economic and Trade Bureau |
(3) |
Researching and obtaining
approval for the company name of JVE from Industrial and
commercial registration office. |
(4) |
Obtaining approval or
certificates from various authorities such as the Planning
Bureau, the Foreign Economic and Trade Bureau, the Industrial
And Commercial Registration Office, the Statistics Bureau, the
National Taxation Administration Bureau, the Local Taxation
Administration Bureau, the Public Security Department, the
Environmental Protection Bureau. the foreign Exchange
Administration Bureau and the Customs etc. |
(5) |
Opening necessary bank
accounts, obtaining a report of corporate capital verification
issued by a Chinese certified public accountant (CPA). Be ready
with the original copy for check-up. |
(6) |
Obtaining the necessary work
permits and resident permits for the legal representatives, etc. |
Please click here for detailed
registration procedures
Time Frame
In most of the circumstances, once all the necessary documents
for application are ready for submission, registration could be done
within 28 working days.
Registration Costs
Our services charge for assisting in setting up a EJV starting
from USD4000.
Please call us at +852 2341 1444 or
email us
for further information.
|
