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China business setup

China JV registration

China JV Registration Service
Hotline: 86-755-82143348,

China JV registration is also called China JV setup, China JV formation, China JV incorporation and China JV establishment. 

A joint venture (JV) is a form of foreign invested enterprise (FIE) that is created through a partnership between foreign and Chinese investors, who together share the profits, losses and management of the JV. As a foreign investor, there are two major reasons to create a JV, (1) when entering a certain industry requires a local partner according to the restrictions outlined in the PRC Foreign Investment Industrial Guidance Catalogue, (2) when a local partner is able to offer tangible benefits such as well established distribution channels, government relationships or significant knowledge of the local market. As with any partnership, in addition to the advantages of working together, JVs also face serious challenges. It is strongly recommended that prior to choosing this form of investment vehicle you consult with the foreign partner of an existing JV in order to better understand the advantages and disadvantages of the JV structure.

China JV registration-Advantages of China Joint Venture
The use of local partner’s existing workforce and facilities
Existing channels for sales and distribution
Use of a partner’s network to build good relationships; avoid red tape and other bureaucratic complexities
Entry into industrial sectors which exclude wholly foreign-owned investment

China JV registration-Procedures for registering a Joint Venture
1. Pre-Licensing of China joint venture registration
A letter of intent or memorandum of understanding must be written and signed by all partners.
Submit JV name for approval by the local Administration for Industry and Commerce (AIC);
AIC requires one name and two alternates to be submitted.
A JV contract and articles of association must be written and signed by all partners.
Where the JV will be acquiring land or other fixed assets, or where the capital investment in the JV will be significant, pre-approval from the National Development and Reform Commission (“NDRC”) may be required.
Certain other government ministries may need to be consulted and to provide approval where the JV is to do business in a relatively regulated industry (for example health or education) or where the collateral impact of the JV’s proposed business activities require review (for example pollution, heavy energy usage).
Obtain a certificate of approval for the establishment of the JV from the Municipal Commission of Commerce (MOC). 

2. Licensing of China joint venture registration
Once the approval certificate has been received, investors must apply and register for a business license with the AIC.  AIC requires most of the same documents as MOC, plus its own standard filing forms.Once a business license is issued, certain post-registration formalities must be completed including:
Record establishment of the business and official seal engraving with the Division of Entry & Exit Administration of the local Public Security Bureau;
Obtain certificate with the organization’s code number from the Technical Supervision Bureau;
Register with and obtain certificates from both the state and local tax authorities;
Tax reports should be submitted to the Tax Administration Department on a monthly, quarterly and annual basis
Register with the Administration of Foreign Exchange to create a foreign currency account;
Open a local bank account;
Register with and obtain a certificate from the Bureau of Statistics;
Obtain certificate of financial registration from the local Finance Bureau; and
Obtain an import-export license from the Customs House.

3. Internal Supervision of China joint venture registration
JVs are also required to appoint at least one individual (of any nationality and residency) as the supervisor of the JV.  The supervisor’s primary role is to monitor the affairs of the JV and the directors of the JV, and to report any irregularities to the board of directors of the JV and to the investor(s) of the JV.

4. Regulatory Supervision of China joint venture registration
In addition to filling annual taxes, JVs must submit an annual audit report to the AIC.

5. Legal Liability of China joint venture registration
A JV is a limited liability company, where the liability of the JV’s investor(s) is generally limited to the assets of the JV.

6. Office Lease of China joint venture registration
Before beginning the application process investors must lease office space for their future business. It is recommended that a clause be added to the lease voiding the contract without penalty should the JV application be rejected. Office relocation requires a tax clearance declaration report, essentially an audit of the company.

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