Shenzhen EJV registration service
Hotline: 86-755-82143348, Email: amyhuang@citilinkia.com
Equity joint venture (EJV)
As we know that EJV is short for Equity joint venture . EJV is one kind of company can be established in Shenzhen China .The corporate form of an EJV is the limited liability company, which possesses the status of a Chinese legal person. It involves joint investment and operation and the sharing of profits and losses, as well as risks in proportion to the partners’ respective shares in the registered capital.
Shenzhen EJV Registration-Forms of Investment and Terms of Shenzhen EJV （Equity joint venture）
1. Fully paid at one time: All parties to the joint venture shall pay up the capital within 6 months from the date of acquiring the business license
2. By installments: All parties to the joint venture shall pay 15% of their respective subscription in the first installment within 3 months from the business license being granted, and pay up the remainder within the period as required; otherwise, it shall be deemed to be automatically winding up.
Shenzhen EJV Registration-Ratio of Investments for Shenzhen EJV（Equity joint venture）
The Law on Enterprises with Foreign Investment requires the foreign investor to contribute not less than 25% of the registered capital of the joint venture, but without a top limit. No. minimum registered capital is required for WFOEs with scope of business of consulting, Trading, retailing, information technology etc. since March 1, 2014. There are minimum registered capital still required for some industries for instance: Banking, Forwarding etc.
Equity joint ventures are the second most common manner in which foreign companies enter the China market and the preferred manner for cooperation where the Chinese government and Chinese businesses are concerned.Normally operation of a joint venture is limited to a fixed period of time from thirty to fifty years. In some cases an unlimited period of operation can be approved, especially when the transfer of advanced technology is involved. Profit and risk sharing in a joint venture are proportionate to the equity of each partner in the joint venture, except in cases of a breach of the joint venture contract.
Share holdings in a joint venture are usually non-negotiable and cannot be transferred without approval from the Chinese government. Investors are restricted from withdrawing registered capital during the live of the joint venture contract. Regulations surrounding the transfer of shares with only the approval of the board of directors and without approval from government authorities will probably evolve over time as the size and number of international joint ventures grow.
It is preferable that foreign exchange accounts are balanced in order to remit profits abroad so that the repatriated foreign exchange is offset by exports from the joint venture. With the elimination of foreign exchange certificates and the further opening of the China market, this requirement is becoming more and more relaxed.
Equity can include cash, buildings, equipment, materials, intellectual property rights, and land-use rights but cannot include labor. The value of any equipment, materials, intellectual property rights, or land-use rights must be approved by government authorities before the joint venture can be approved.
After a joint venture is registered, the entity is considered a Chinese legal entity and must abide by all Chinese laws. As a Chinese legal entity, a joint venture is free to hire Chinese nationals without the interference from government employment industries as long as they abide by Chinese labor law. Joint ventures are also able to purchase land and build their own buildings, privileges prevented to representative offices.
Contact Us
If you have further queries, don’t hesitate to contact ATAHK anytime, anywhere by simply visiting ATAHK’s website www.3737580.net, calling 86-755-82143348 or emailing to amyhuang@citilinkia.com.