I. Concept of a Sino-foreign joint venture
A Sino-foreign joint venture refers to a cooperative enterprise jointly established by foreign companies, enterprises or other economic organizations or individuals and Chinese companies, enterprises or other economic organizations in the territory of China according to related Chinese laws, that is, a limited liability company which is jointly established and operated by more than two investors with different nationalities to share profits & losses and bear risks.
II. Shareholder restriction of a Sino-foreign joint venture
According to the provisions of Sino-foreign joint venture, Chinese party must invest in the name of the company, and there is no restriction on the foreign party, which may be an individual or a company.
But the Shanghai Pudong Area took the lead as a pilot in 2010, allowing Chinese party in a Sino-foreign joint venture to invest with the individual as a shareholder. For example, a joint venture model between a Chinese and a foreigner only permits the establishment of a Sino-foreign joint venture in the Shanghai Free Trade Zone.
III. Registered capital of a Sino-foreign joint venture
There are no special requirements on the registered capital of a Sino-foreign joint venture in the most industries. At present, the registered capital of a Sino-foreign joint venture is subscribed, there is no mandatory provision for the amount of registered capital in place at the early stage. As long as the proportion of contribution determined by both Chinese and foreign investors is in place according to the appointed time of contribution. It is also quite convenient for the foreign party to make a capital contribution. In accordance with the agreed proportion, overseas shareholders can remit the investment capital from the overseas account to the capital account of a Sino-foreign joint venture (to be established), and then to RMB account after the exchange settlement. The investment capital of overseas shareholders is remitted according to the proportion of contribution, then there will be no issue of any foreign exchange restrictions.
IV. Registered address of a Sino-foreign joint venture
In case of establishment of a Sino-foreign joint venture, the registered address must be required first, otherwise a Sino-foreign joint venture cannot be registered. This address is required to be an office building, not to be a foreign-related office building. Because the establishment time of a Sino-foreign joint venture is generally about 60 working days, causing the cost that cannot be actually operated is increased or a proper registered address cannot be found at a time, this increases not only the operating cost of the company, but also the market cost. At this time, we can consider the following method:
Our company can provide a virtual address in the suburbs, which is only used for the company establishment, it is no necessary to work in that place. Two advantages are as follows:
1. Cost saving: The cost is low, and the registration time and operation cost of a Sino-foreign joint venture will also not be delayed because no appropriate registered address is found;
2. Long-term effectiveness: The trouble of moving in the city later is avoided.
V. Employment mechanism of a Sino-foreign joint venture
A Sino-foreign joint venture is an independent legal person institution, which can autonomously recruit domestic and foreign employees, and can independently open social security and provident fund accounts, without the agency of the third-party service outsourcing company, thus greatly reducing the cost of expenditure.
VI. Financial mechanism of a Sino-foreign joint venture
Because a Sino foreign joint venture belongs to an independent legal person institution, with independent financial accounting, a complete set of accounting data system can be established in the sub-items, such as operations, sales, costs, profits and dividends.
VII. Required materials for the registration of a Sino-foreign joint venture
Materials that Chinese and foreign investors need to provide:
1. Chinese investors shall provide the original business license;
2. The subject qualification certificate or identify certificate of foreign investors shall be submitted to Chinese Embassy/Consulate in their own country after the notarization by the competent authorities of their own country. As for the subject qualification certificate or identify certificate of investors in Hong Kong, Macao and Taiwan, the notarial documents of the local notary agency shall be legally provided in accordance with the special provisions or agreement;
3. Original identify certificates of the legal person and supervisor;
4. Original identify certificates of directors;
There are many other materials to be provided, usually in about 20 copies. And the specific circumstance shall depend on the actual conditions.
VIII. Registration fee of a Sino-foreign joint venture:
The agency service fee is USD 3,000-8,000, the price will be different due to different industries
The government fee is USD 100-500
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