1. 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 equity 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.
2. REFERENTIAL POLICIES in SHANGHAI of CHINA
According to Measures for the Administration of Foreign Funded Commercial Enterprises (Ministry of Commerce of the PRC, 2004, No. 8), foreign funded enterprises may engage in brokerage, wholesale, retail, and other specially authorized commercial activities. Foreign funded commercial enterprises must meet the following requirements:
(1) Minimum registered capital requirements as detailed in Corporate Law
(2) Minimum registered capital and total investment amount regulations
(3) Term of operation of foreign funded enterprises generally does not exceed 30 years; in central and western China 40 years. Foreign funded wholesalers may not sell fertilizers, salt or tobacco refined oil, or crude oil before Feb. 11, 2006.
As detailed in the Shanghai Municipal Government's Provisional Regulations of Shanghai Municipality on Encouraging Overseas Investment in the Establishment of Research and Development Institutions, companies establishing R&D centers in Shanghai enjoy the following privileges:
(1) Research equipment for company use is exempt from customs duties and accompanying value added taxes;
(2) Software purchased from abroad is exempt from custom duties and value added tax;
(3) Income from technology transfer, technology development, technical consulting, and technical services is exempt from business tax;
(4) Companies with R&D expenses increasing at over 10% annually will receive a 50% reduction of tax rates. Independently owned foreign funded companies can deduct R&D costs from pre tax income.
3. REGISTERED AND PAID-UP CAPITAL
Total registered capital should be 1million RMB at least, and the capital invested by foreign part must be 25% of the total capital at least. All of the registered capital can be paid in one time; (within 3 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, each part of joint venture should pay for 20% of the registered capital.
4. OPERATING PROCEDURE:
(1) ENTRUSTING PROCEDURE
Step1: Fill in the application form (sign the agreement)
Step2: Entitle the company name
Step3: Pay for the earnest money (50% of total)
Step4: Submit the needed document
Step5: Check the document
Step6: Submit all the document to the government
Step7: Inform the course to the customer
Step8: Finished in the 30-50 working days
Step9: Inform the customer to take the document
Step10: Pay the spare money
Step11: Sign the receipt.
(2) GORVERNMENT PROCESSING PROCEDURE
Step1: Check the name from Industrial and commercial Bureau (pre-reserve commercial number/ name checking)
Step2: Approval of fire and environment authorities
Step3: pre-approval
Step4: Go to Bureau of Trade and Industry for the foreign investment approval certification
Step5: Apply for the business license from Industrial and commercial bureau
Step6: Apply for chops from Public and Security Bureau
Step7:Apply for the Organization Code License from Bureau of Quality and Technical Supervision
Step8:Apply for the registration license from State Administration of Taxation &Local Administration of Taxation
Step9: Apply for the foreign exchange registration license/opening capital account license from State Administration of Foreign Exchange
Step10: Opening the capital account in the bank
Step11: Opening the basic account in the bank
Step12: Apply for the IM&EX registration license from Customs (if needed)
(3) CUSTOMER PROCESSING PROCEDURE
Step1: Foreign investors director meeting resolution
Step2: Entitle the company name
Step3: Business scope confirmation
Step4: Registered capital confirmation
Step5: Shareholder confirmation
Step6: Appoint legal representative of Chinese company
Step7: Chinese office confirmation (consider fire and environment factors if needed)
Step8: Transact lawyer's notarization and submit it to the authority dept to sign
Step9: Reference letter of bank
Step10: Entrust to transact
Step11: Inject the investment money to the capital account on behalf of investor
Step12: Capital verification
Step13: After-approval
5. DOCUMENTS REQUIRED
(1) 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 photos;
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 (three 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)
(2) 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.
(3) 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.
6. OUR SERVICES
ATA provides one-stop tailored-made services for foreign companies which would like to set up joint venture enterprises in Shanghai 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)Opening the capital account;
(13) Customs declaration registration certification.
7. DURATION
Around 80 working days
8.Contact Us
For further queries, you are welcome to visit ATA website www.3737580.net or email to atahkhk@21cn.com / ata-cfmp@hotmail.com or contact any of the following branches, thank you.
HONGKONG TEL:852-27837818 SHENZHEN TEL:86-755-82143272
SHANGHAI TEL:86-21-58763186
ATA——Global Corporate Solution Provider, Value Investment & Strategic Development.
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