China CJV Formation
China CJV formation is also called China CJV setup, China CJV registration, China CJV incorporation and China CJV establishment.
A Cooperative Joint Venture (CJV) is a joint venture between a Chinese and a foreign company within the territory of China. More and more enterprises come to register companies in Hong Kong and overseas countries as a testing ground to win overseas market. Then, based on the testing ground company, they invest in the mainland aiming at setting up Sino-foreign joint ventures, enterprises with Sino-foreign cooperation, and wholly foreign-owned enterprises and forming the pattern of having stores in front and factories behind, which can not only enhance the corporate image and win the trust of overseas customers, but also can enjoy the preferential policies of China.
What is Cooperative Joint Venture Company in China
A Sino-Foreign Cooperative Joint Venture (CJV) is a joint venture between a Chinese and a foreign company within the territory of China. The Chinese company usually provides the labor, land use rights and factory buildings, while the foreign company brings in the necessary technology and key equipment, as well as the capital. The joint venture is based on a cooperative joint venture contract in which matters like the terms of cooperation, the division of earnings, the ownership of property upon the termination of the contract term of the CJV, the sharing of risks and losses, etc are laid down. The foreign investors could be foreign corporations (including Hong Kong, Macao and Taiwan), individuals or partners, but Chinese investors must be corporations, not individuals.
Company Name of Cooperative Joint Venture Registration in China
In China, there are restrictions imposed on company name. In the same trade or business, neither company name nor trade name could be duplicated. Generally, the name consists of the four following parts: administrative division (e.g. Shenzhen), trade name (e.g. VINI Group), industrial characteristics (e.g. Business Management) and organization form (e.g. Company Limited). The name is not available until is verified and reserved by the administration for industry and commerce. There are many factors you need to consider when you name your company:
Registered Capital & Paid-in Capital of China Cooperative Joint Venture Companies
Now the China government has cancelled the requirements for the minumum registered capital ofr the China CJV formation, the investors can decide the capital according to the expenses which are required to cover. The requirement of the registered capital is different according to companies of different properties.
Business Scope of China CJV Companies
This refers to the specific business transaction of the foreign invested companies want to operate in Shenzhen. The business scope of Shenzhen company is directly restricted by its company name and registered capital. The more the registered capital is, the broader the business scope is.
Process of China Co-operative Joint Venture Formation
Sign the trust deed (for confirmation)—hand in all the needed materials—effect the payment—data auditing—complete the documents of application—sign the documents—hand in the documents to the related departments of government by sequence—notify the process—complete in about 20 to 60 working days—inform the customers to receive the documents—accept and sign the documents
Advantages for Co-operative Joint Venture in China
From the point of view of foreign investment, the advantages of setting up foreign-owned enterprises are:
1. Shared resources, complementation of advantages;
2. Flexible method of incorporation, as a legal entity or not
3. Diversified management structure, in adoption of the system of the Board of directors, the system of joint management committee, or the system of administration by mandate (i.e. to entrust other party than the Chinese and foreign partner to operate and manage);
4. The foreign investor is able to recover investment in priority;
5. Entitled to various preferences for the foreign investor.
Sino-Foreign Co-operative Joint Venture allocates its profits not on the basis of investment amount or shareholding, but according to the rights and obligations determined by contract between all parties, where the foreign party can recover the investment in priority, and after the contract ends, fixed assets of the co-operative venture are generally vested in the Chinese party. Tannet Group Limited is a diversified international company, offering the services of Shenzhen company formation professionally.
If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net or www.shenzhen-company.net , or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422 or 86-755-82143181 or emailing to firstname.lastname@example.org.
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