Joint Venture

Joint Venture (JV)
A Joint Venture is a business arrangement in which the participants create a new business entity or official contractual relationship and share investment and operation expenses, management responsibilities, and profits and losses.
The Chinese authorities encourage foreign investors to use this form of company in order to obtain exposure to advanced technology and new management skills. In return, foreign investors can enjoy low labour costs, low production costs and a potentially large Chinese market share. Joint Ventures are sometimes the only way to register in China if a certain business activity is still controlled by the government, for example restaurants, bars, building and construction, car production, cosmetics etc.

PROCEDURES OF THE PEOPLE'S REPUBLIC OF CHINA FOR THE REGISTRATION AND ADMINISTRATION OF CHINESE-FOREIGN JOINT VENTURES

(Promulgated by the State Council on and Effective as of July 26, 1980)
Article 1.
In accordance with the provisions of the Law of the People's Republic of China on Chinese-Foreign Joint Ventures, these Procedures are formulated in order to carry out the registration and administration of Chinese-foreign joint ventures and to safeguard their lawful operations.
Article 2.
A Chinese-foreign joint venture that has been approved by the Foreign Investment Commission of the People's Republic of China shall, within one month after approval, register with the General Administration for Industry and Commerce of the People's Republic of China. The General Administration for Industry and Commerce of the People's Republic of China shall authorize the administrative bureaus for industry and commerce of the provinces, autonomous regions and municipalities directly under the central authority to handle registration procedures for Chinese-foreign joint ventures within the areas under their jurisdiction, and business license shall be issued after examination and approval by the General Administration for Industry and Commerce of the People's Republic of China.
Article 3.
A Chinese-foreign joint venture that applies for registration shall present the following documents: (1) The document of approval issued by the Foreign Investment Commission of the People's Republic of China; (2) Three copies each of the Chinese and foreign language texts of the joint venture agreement and contract signed by the parties to the joint venture and its articles of association; and (3) A copy of the business license or other documents issued by the competent department of the government of the country (or region) from which the foreign joint venturer(s) come.

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