THE CONCEPT OF JOINT VENTURE
The Sino-foreign joint venture is the enterprise that foreign companies, enterprise and other economic organizations or individuals (hereinafter referred to as “foreign joint ventures”) to establish equitable joint venture together with Chinese companies, enterprise and other economic organizations (hereinafter referred to as “Chinese joint ventures”) 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.
A Sino-Foreign Cooperative Joint Venture (CJV) is a joint venture between a Chinese and a foreign company within the territory of China. The Chinese company usually provides the labour, land use rights and factory buildings, while the foreign company brings in the necessary technology and key equipment, as well as the capital. This joint venture is based on a cooperative joint venture contract in which matters like the terms of cooperation, the division of earnings, the ownership of property upon the termination of the contract term of the CJV, the sharing of risks and losses, etc are laid down.
Differences between EJV and CJV
1• While an EJV is always a legal person, and thus a limited liability company, a CJV can be a legal as well as a non-legal person. The latter option is not very common though because it would mean that the partners of the joint venture would be personally liable for any losses the company might make in the future
2• In an EJV the distribution of profits has to take place equivalent to the ratio of the capital contributions made by the parties, while the distribution in a CJV can take place according to the parties’ wishes. A CJV is thus a lot more flexible than an EJV.
3• In a CJV a party may, besides contributing registered capital, provide for so-called cooperative conditions (Hence the name Cooperative Joint Venture), e.g. market access rights.
Establishing a Sino-Foreign Cooperative Joint Venture
In China, only Chinese company’s names are officially used, while English company’s names are for reference only. NOT every name will be accepted by the Industrial and Commercial Administrative Bureau (ICAB), known abroad as Company Registry. And in China some sectors need special license. It is important to know that the wording of a company’s name should be in conformity with the registered capital. Your company’s name must be distinguished from the others’ if you want it to be accepted by the ICA.
REGISTERED AND PAID-UP CAPITAL
1) For the trading enterprises, the registered capitals are usually required as much as RMB 500,000 or above; (the lowest capital is RMB 30,000)
2) For the manufacturing enterprise, the registered capitals are usually required RMB 1 million or above;
3) For the company of consultancy, technology, market research and development, the registered capitals are usually required RMB100,000 or above;
All of the registered capital can be paid in one time; (within 6 months after the date of issuance of the Company’s business license) and can also be paid for many times in two years. In the first 3 months, 20% of the registered capital is mandatory. The terms of payment is determined by the volume of registered capital. The capital verification fees will be reduced if the terms of payment reduce.
Before filing the documents required with the ICAB, the applicant should confirm the business scope, which ultimately appears on the business license. Amending the business scope requires further application and approval. General business scope usually includes, investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, science and technology, manufacturing, wholesaling, retailing, import and export, etc.
PROCESSING STEPS AND TIME
Fill in the application form or sign the agreement =》Payment =》Name check and reservation=》Provide documents required =》Filing the papers with the relevant government departments.=》Open bank A/C =》Certificates and Matters for collection =》Tax return service and business follow-up
It takes 45 to 85 working days to finish the processing from the date that the documents are ready for application.
GORVERNMENT PROCESSING PROCEDURE
Check the name form Industrial and commercial Bureau (pre-reserve commercial number/ name checking) =》Approval of fire and environment authorities =》pre-approval=》Go to Bureau of Trade and Industry for the foreign investment approval certification=》Apply for the business license from Industrial and commercial bureau=》Apply for chops from Public and Security Bureau =》Apply for the Organization Code License from Bureau of Quality and Technical Supervision=》Apply for the registration license from State Administration of Taxation &Local Administration of Taxation=》Apply for the foreign exchange registration license/opening capital account license from State Administration of Foreign Exchange=》Opening the capital account in the bank=》Opening the basic account in the bank=》Apply for the IM&EX registration license from Customs (if needed).
CUSTOMER PROCESSING PROCEDURE
Foreign investors director meeting resolution=》Entitle the company name =》Business scope confirmation =》Registered capital confirmation=》Shareholder confirmation=》Appoint legal representative of Chinese company=》Chinese office confirmation (consider fire and environment factors if needed) =》Transact lawyer’s notarization and submit it to the authority dept to sign=》Reference letter of bank=》Entrust to transact=》Inject the investment money to the capital account on behalf of investor=》Capital verification=》After-approval
For the trading enterprise, the following documents are required:
1) Board of director’s meeting minutes or resolution of two parties;
2) One proposed name (in Chinese), and provide two back-up names in case the first name is not available;
3) Detailed information about the business scope and registered capital;
4) Feasible study report;
5) Original Articles of Association;
6) Duplicate copy of the business license and certificate of incorporation of two parties;
7)The original and copies of identity certification of pre-established company’s legal representative, and color photo;
8) Two original bank reference letters (from foreign investor’s bank) indicating foreign investors’ creditability, issued within 6 months in both English and Chinese language;
9) Lawyer’s notarization
10) Chinese investor’s annual audit report and seals;
11) The office address: your own house property or the rented commercial building (two original copies of lease signed and sealed by the local Housing Management Authority , showing the recognized registered address of joint venture. The signing party should be in the name of one shareholder or the foreign company; the purpose must be for commercial use)
For the manufacturing enterprise, the following documents are required:
1-9) The same as above
10) Production address: your own house property or the rented commercial workshop (two original copies of lease with signature by Housing Management Authority, showing the recognized registered address of joint venture. The signing party should be in the name of one shareholder or the foreign company; the purpose must be for workshop use)
11) Approval of environmental and fire departments.
For the abroad natural person, the following documents are required:
1) Board of director’s meeting minutes or resolution of two parties;
2) Duplicate copy of identity certification of foreign investors& Legal representative, directors of pre-established company;
3) Lawyer’s notarization of foreign investor’s identity certification;
4) Duplicate copy of ID & two color photos of the pre-established company’s legal representative;
5) Feasible study report;
6) Original copy of Articles of Association;
7) Two original bank reference letters (from foreign investor’s bank) indicating foreign investors’ creditability, issued within 6 months in both English and Chinese language;
8) Chinese investor’s business license, annual audit report and company’s seals.
We provides one-stop tailored-made services for foreign companies which would like to set up wholly foreign funded enterprises in GUANGZHOU of China.
1) Approval document;
2) Original Articles of Association;
3) Foreign investment enterprise approval license;
4) Both original and duplicate copy of business license;
5) Cachet, financial, custom and legal representative private chop;
6) Seal carving registration card;
7) License of Opening account;
8) Opening and canceling account confirmation;
9) Both original and duplicate copy of Organization Code License & card;
10) Registration license and form of State &Local Administration of Taxation;
11) Foreign exchange registration license and approval certificate;
12) Customs declaration registration certification;
13）Finance registration license and form.
1) For manufacturing enterprise: 65-100 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 enterprise: 65-100 working days will be finished. (The detailed time depends on the operation type)
3）For consultant company:60-80 working days will be finished.
TEL: +86 020-83652006
Notes： 1、Hand over of such as for non- Chinese document, need the translation organization that China specifies a translation Chinese, hand over together.
2、Carry out time to hand over a well-found day by consigning down payment and data since start computing.