SELECT content FROM law_ref_lang_word WHERE word_id=136 AND lang_id=3 FirstLaw 第一國際法律事務所
【China Affairs】
  • Introduction to the Mainland Business Organization                                                        

                    ◎  Foreign companies enter intoChinese marketfor investment, in order to conduct the business
                          related activities, mainly take twoformsof the organizations:

                          First, the establishment of foreign invested enterprises in China; the second is the establishment
                          of resident offices of foreign enterprises.

  • The Establishment of ForeignInvested Enterprises                                                           

          ◎  The so-called three types of foreign-funded enterprises established  in Chinaean:

                         1.Sino-foreign joint ventures;

                         2.Sino-foreign cooperative enterprises;

                         3.Foreign-funded enterprises;

                    ◎  Sino-Foreign Joint Ventures;

                          1.Sino-foreignjoint ventures refer to foreign companies, enterprises and other economic
                                  organizations or individualsto joint with Chinese companies, enterprise or other economic
                                  organizations in establishing joint ventures in China for investment, management, sharing
                                  total risk and responsibility for profits and losses and in some business activities of
                                  enterprises,in accordance with the principle of equality and mutual benefit and subject to
                                  approval by the Chinese Government.A joint venture shall take the form of a limited liability
                                  company.

                         
2.Features:

                                 2-1.The proportion of the investment contributed by the foreign joint venture(s)
                                                 shall generally not be less than 25% of the registered capital of a joint venture.

                                 2-2.The parties to the venture shall share the profits, risks and losses in proportion
                                                 to their respective contributions to the registered capital.

                                 2-3.No assignment of the registered capital of a joint ventureshall be made without
                                                 the consent of the other parties to the venture.
                   
                   
◎  Sino-Foreign Cooperative Enterprises

                          1.Sino-foreign cooperative enterprisesrefer to, in order to expand economic cooperation
                                  and technical exchanges, foreign companies, enterprises and other economic organizations
                                  or individualsin accordance with the principles of equality and mutual benefit,joint with
                                  Chinesedomestic enterprise or other economic organizations in establishing economic
                                  organizationsin China according to the contractwhichprescribedthe investment conditions
                                  for the parties, the distribution of earnings, the sharing of risks and losses, the manners
                                  of operation and management.

                          2.Features

                                  The Chinese and foreign parties of Sino-foreign cooperative enterprises shall prescribe
                                  in the contract such matters as the investment or conditions for cooperation, the distribution
                                  of earnings or products, the sharing of risks and losses, the manners of operation and
                                  management and the ownership of the property at the time of the termination of the
                                  cooperative enterprise.
 
                  
   Foreign-Funded Enterprises

                          1.Also known as wholly foreign-owned enterprises,refers to those enterprises established
                                  in China byforeign enterprises and other economic organizations or individual sexclusively
                                  with their own capital. (The term does not include branches set up in China by foreign
                                  enterprises and other foreign economic organizations.)

                          2.Features

                                 2-1.Foreign-funded enterprises shall be established in such a manner as to help the
                                                 development of China's national economy.

                                 2-2.The investments of a foreign investor in China, the profits it earns and its other
                                                 lawful rights and interests are protected by Chinese law.

                                 2-3.The state shall not nationalize or requisition any foreign-funded enterprise.
                                                 Under special circumstances, when public interest requires, foreign-funded 
                                                 enterprises may be requisitioned by legal procedures and appropriate 
                                                 compensation shall be made.

  • Resident Office of Foreign Enterprises                                                                              

                    ◎  The resident offices of foreign enterpriserefers to the working bodies established by foreign
                          enterprises in accordance withthe Regulations within China engaging in non-profit programs
                          relatedto their own business.

                          The resident offices of foreign enterprisedo not possess thestatusof a legal person.

                    ◎  Features

                         1.A foreign enterprise shoulddesignate onechief representative.

                         2.The chief representative of the foreign enterpriseshall sign the registration application
                                 documents of its representative officeon behalf ofthe foreign enterprisewithin the scope
                                 authorizedby the foreign enterprise in writing.

                         3.A representative offices shallnot conductprofit-making activities, except as otherwise
                                 provided.

                         4.A representative office may engage in the activities related to the business of foreign
                                 enterprises as market survey, displays and campaigns; or liaison activities connected
                                 with sales of the product of foreign enterprise, service providing, domestic procurement
                                 and investment.

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