Chengdu Company Registration Service
Hotline: 86-755-82143422 Email: anitayao@citilinkia.com
Sino-foreign Joint Venture Enterprises
Sino-foreign joint venture is an enterprise jointly invested and managed by foreign companies, enterprises and other businesses or individuals together with Chinese companies, enterprises or other businesses on China's territory. The special character of such enterprises is that the two sides make joint investment and practice joint management while they will together run the risk, and be responsible for the profits and losses in accordance with the proportion of the investment they make. Each side of the joint management can make its investment with currency or with buildings , machines, site usage right, industrial property right or exclusively-possessed technologies, whose values will be calculated. The proportion of foreign investment should not be lower than 25 per cent. The organizing form of a Sino-foreign joint venture is a limited-liability company with board of directors as its organ of supreme power.
Sino-foreign Co-operative Enterprises
Sino-foreign co-operatively managed enterprise is also called a contract-style jointly managed enterprise. It is an enterprise jointly invested or run according to co-operative contracts by foreign companies, enterprises and other businesses or individuals together with Chinese companies, enterprises or other businesses on the Chinese territory. The investment made by the Chinese and the foreign sides is generally not divided into investment proportions and profits are not distributed according to their investment proportions, either. The jointly signed contracts clearly stipulate the rights and commitments of both sides including investment or co-operative conditions, profits or distribution of products, responsibilities for risks or losses, the style of management and the ownership of properties when the contracts expire. Generally speaking, in a Sino-foreign co-operatively managed enterprise, foreign co-operators provide all or most of the capital while the Chinese side provides land, workshops, useful equipment and facilities and sometimes a certain amount of capital. If the contracts by the Chinese and foreign partners stipulate that all the assets and properties of the enterprise will belong to the Chinese side when the contracts expire, the foreign side can retrieve its investment during their co-operation.
Foreign-funded Enterprises
A foreign enterprise is an enterprise with sole foreign capital. It is an enterprise established within the boundaries of China and in which all the capital is invested by foreign investors, who might be foreign companies, enterprises and other businesses or individuals.
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BOT Investment Method
BOT is the short form for build--operate--transfer. A typical BOT formula involves infrastructure projects contracted by the government to private companies(to foreign investment companies in China's case). The companies which have contracted the project accumulate funds and construct the project. They own, run and renovate the facilities in the contracted period of time and retrieve their investment and reasonable profits through collecting fees of use and services .When the contracts expire, the ownership of the facilities will be returned to the government gratuitously. The BOT formula is mainly used in developing toll-charging expressways, power stations, railways, waste-water handling facilities and urban subways.
Compensation Trade
It is a pattern of using foreign capital in which technology trade and commodity trade are combined with credits. This basically means that foreign business people provide directly or on the basis of credit machines and facilities to a Chinese enterprise and the Chinese enterprise repays by installments the cost and the interests the cost and the interests of the imported machines and facilities and technologies. The major patterns of compensatory trade include direct compensation, indirect compensation, comprehensive compensation and compensation with labour service.
Foreign Investment Financial Institutions
Foreign-funded financial setups are referred to the branches, which are established by foreign financial setups and do financial business within the boundaries of China or foreign solely owned financial organs and financial organs of Sino-foreign joint ventures with the status of Chinese corporation. They are foreign-invested enterprises in the financial field. In most cases, foreign-funded financial setups are established in the form of Chinese branches of financial setups of foreign nations (for example, branches of a foreign bank or a foreign insurance company). They have no status of a Chinese corporation. Foreign financial setups which apply to set up foreign-funded financial setups must have a certain amount of assets and must be strictly supervised financially in their home country. They must have set up representative organizations in China for more than two years. To establish foreign-funded financial setups, application should be made according to relevant laws and regulations and approved by the State financial authorities.
Investment Companies
Investment companies are referred to companies which engage in direct investment in China established by investors from foreign countries either in the form of solely foreign-owned companies or joint ventures with Chinese investors. Such companies are limited-liability companies. Applicants for establishing investment companies must be qualified in the following aspects:(1)The total assets of the investor must not be less than US$400 million during a year before he makes an application. In addition, the investor has established foreign-invested enterprises within the boundaries of China and he has already handed over more than US$10 million as registered capital of the enterprises. What is more, three or more suggestion reports he has made for proposed project investment have been approved; or: the investor has established more than 10 enterprises with foreign investment within China's boundaries, which engage in production or construction of infrastructure and he has in fact allocated more than US$30 million to the registered capital of the enterprises.(2) If the investment company is a joint venture, the total assets of the Chinese investor must not be less than 100 million yuan. (3)The registered capital of a investment company must not be less than US$30 million.
Foreign Investment Co. Ltd.
The total capital of a foreign-invested limited company is composed of equal stocks according to the relevant regulations of the State. Shareholders who have purchased the stocks are responsible for the company. The company is liable for its debts with all its properties. Both Chinese and foreign shareholders own stocks of the company. Foreign shareholders whose stocks bought and held by them are worth more than 25 per cent of the company's registered capital are corporations of the company.
Processing Supplied materials and Assembling Supplied Parts
It means processing materials imported from abroad and assembling spare parts brought in from abroad. It is an economic co-operative pattern with foreign countries in which foreign businessmen provide raw materials and accessories, spare parts, elements, packaging materials, etc. while the Chinese enterprises do the processing and assembling according to the requirements of the foreign enterprises. The products are transferred to the foreign businessmen for sale while the Chinese side collects fees in foreign exchange for their work.
International Leasing
It is an economic co-operative pattern in which the lessor rents his machines or other facilities to a lessee for a long time through signing leasing contracts and the lessee uses the machines or other facilities for production or business activities. During the leasing period, the lessor has the ownership of the rented goods while the lessee has the use right of the rented goods and pays rents to the lessor regularly. When the leasing contract expires, the rented goods will be handled according to method decided by the two sides. The leasing business consists mainly two formulas --one for fund-collecting and the other for business.
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