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Joint Venture 2018-03-07T04:42:33+00:00

Joint Venture in China

A good partner may lead your business plan to success

China allows foreign companies, enterprises, other economic organizations or individuals to joint with Chinese companies, enterprises or other economic organizations in establishing Joint Ventures. Each party to a joint venture may make its investment in cash, technology, industrial rights, etc. The capital in form of technology and equipment needs to be approved by the government.

The formation of a joint venture can take up to 12 months depending on the submissions. The registration procedure is similar to a WFOE (Wholly Foreign Owned Entrprise), plus the elaboration of the legal agreements between parties.

Keypoints

What you should know about joint ventures:

  • Enables foreign investors to use the partners’ labor force and already existing facilities, networks, channels, etc.

  • Partnering with locals also helps to to avoid administrative issue and other bureaucratic complexities.
  • Some sectors and industries in China are only accessible for foreign investors when creating a joint venture with Chinese partners.

  • The parties involved may not share the same strategic or commercial interests.

What Are the Conditions?

  • A joint venture shall take the form of a limited liability company.

  • The proportion of the investment contributed by the foreign joint venturer(s) shall generally not be less than 25% of the registered capital of a joint venture.

  • A joint venture shall have a board of directors and managers

  • There is no minimum capital investment requirement for the establishment of the JV. However, there are exceptions to special business scopes.

China Market Entry Vehicles

Have a broader perspective on China’s market entry vehicles

WFOE

Commercial capacity

Very high

Administrative efforts

Very high

Hiring autonomy

Very high

Cost

High

Setup time

6 – 12 months
See More

Sales Office

Commercial capacity

High

Administrative efforts

Low

Hiring autonomy

High

Cost

Low

Setup time

1 – 2 months
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Rep. Office

Commercial capacity

None

Administrative efforts

Low

Hiring autonomy

Medium

Cost

Low

Setup time

2 months
See More

Joint Venture

Commercial capacity

Very high

Administrative efforts

Very high

Hiring autonomy

Very high

Cost

High

Setup time

6 – 12 months
See More

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