Company establishment in Zhuhai is one of Tannet’s business incubation services in Guangdong-Hong Kong-Macao Greater Bay Area. Zhuhai is one of the hot spots for foreign investment. It is a prefecture-level city on the southern coast of Guangdong province in China. Located in the Pearl River Delta, Zhuhai borders Jiangmen to the northwest, Zhongshan to the north, and Macau to the south. Zhuhai was one of the original Special Economic Zones established in the 1980s, and is also one of China's premier tourist destinations, being called the Chinese Riviera.
Before starting up a business in Zhuhai and other parts in the world, you have to know what are the options. Foreign investors generally establish a business presence in China in one of five modes: Wholly Foreign Owned Enterprise (WFOE); Representative Office (RO); Foreign Invested Partnership Enterprises (FIPE); Joint Venture (JV). To facilitate people who want to invest and set up company in Zhuhai, the following explains how to set up a joint venture in Zhuhai.
Introduction to a Joint Venture in China
A Joint Venture (JV) is when two or more parties jointly invest and own a stake respectively and share profits, operation expenses, risk and control of the company. In China, JVs are jointly funded, co-operated by both Chinese and foreign investors, and both parties shall be responsible for the profit and loss, risks. Foreign investors may be enterprises, other economic organizations or individuals. Chinese operators are currently limited to enterprises and other commercial organizations, excluding individuals and individual enterprises.
The joint venture shall share the profit and loss due to the proportion of the investment given by the parties to the joint venture. The legal basis for setting up a Joint Venture in China shall be the law of the People's Republic of China on Joint Ventures and Joint Venture agreement.
Benefits of a Joint Venture
With a Joint Venture, you could enjoy benefits from mutual-partners sides:
1. Rapid access to the Chinese market with resource sharing;
2. Obtain the advanced management experience of the joining party;
3. Expanding the scale of enterprises with the acquisition of joint venture funds;
4. Acquire the intangible assets of the joint venture (such as brand, etc.) and marketing channels.
Features of a Joint Venture
1. The organizational form of the Chinese-foreign joint venture is Limited Liability Company with the status of a legal entity.
2. Among the shareholders of a Joint Venture, the alien side could be foreign companies, enterprises, other economic organizations or individuals, while Chinese team only includes Chinese companies, enterprises, and other industrial organizations, except to Chinese citizens.
3. For the registered capital of a Joint Venture, the proportion of the contribution of a foreign party shall not be less than 25%.
4. The Chinese and foreign party shall profits, losses and recover the investment under the proportion of capital contribution.
5. Joint Venture shall not have the shareholders' meeting, and its supreme authority shall be the board of directors.
6. The members of the board of directors shall allocate according to the proportion of investment and the articles of association of the Joint Venture.
How to Establish a Joint Venture in Zhuhai
The establishment of a Chinese-foreign joint limited company must meet the industrial policy of China's utilization of foreign capital, and it is currently limited to the industries that have foreign investment encouraged and allowed by the state. To establish a Chinese-foreign joint limited venture, there should be more than 5 sponsors, at least one foreign for shareholders among them, others are legal persons resisted in China.
The minimum registered capital of the proposed Chinese-foreign joint limited venture is 30 million RMB. Moreover, shares which foreign shareholders subscribed shall be not less than 25% of the registered capital of the company. The shares subscribed by the sponsors shall not be transferred within 3 years from the date of the establishment of the company. When the term expires, the initiator shall not violate the provisions of the minimum 25 percent of the shares held by the shareholders of the foreign party and shall be approved by the original examination and approval authorities.
Business set-up in Zhuhai is a big project by itself, which requires financial and time commitments, and business management knowledge. Choosing a competent agent to manage the complex process will be a cost-effective and time-saving way to avoid potential pitfalls. Tannet is glad to help.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to info@citilinkia.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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