Hainan company establishment can be achieved in several forms, such as representative office (RO), wholly foreign invested enterprise (WFOE), joint venture (JV). etc. Here, Tannt mainly clarify how to register a joint venturein Hainan. On October 16, China released a plan to build Hainan into a pilot free trade zone including substantial relaxation of market access for foreign companies and upgrading of trade facilitation to create a gateway for opening up toward the Pacific and the Indian oceans. Those who intend to enter into Chinese market now can take the opportunity to set up a business in Hainan.
Why Set Up 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.
Types of Joint Venture
1. Equity Joint Ventures
EJV are the second most preferred methods of making foreign investments, especially in cases where Chinese government and local businesses are involved. This manner of cooperation involves exchange of Chinese market knowledge, perks of preferential treatment, inexpensive labor and efficient production capabilities from the Chinese side, whereas, from the foreign partner, technology, management skills and marketing expertise are expected.
EJVs are formed by capital investment from both, foreign and domestic company. The profit and loss sharing is based on the asset or capital contribution of each shareholder.
2. Cooperative Joint Ventures
CJVs are much more flexible in nature, the offer foreign companies better profit and liability sharing mechanism and are also known as Contractual Joint Ventures. This type of joint ventures were more common in the past, when China used to supply inexpensive labor and land and the foreign investors used to provide capital and technology. Special capital recovery of foreign partner’s capital may also be offered to encourage business activities in a region.
CJVs can also take a form of Limited Liability Company or become a non-legal person, where the liability of the company is connected with the investors.
Procedure of Establishment
The complete process of registering and establishing a joint venture can take around 4 to 6 months. It’s recommended that you engage with a business consultancy company located in China to streamline the registration process for you. They will know the market in a better way and will be able to negotiate the joint venture agreement in native language, which is always an additional benefit. In addition to this, domestic consultancy services are on better terms with the local authorities and have superior know-how about the procedures and documents required.
Required materials:
1. Business registration documents of all parties to the joint venture;
2. Foreign partner's bank reference letter;
3. Real estate rights certificate or office lease contract;
4. ID card of the legal representative;
5. ID cards of individual shareholders and directors;
6. Feasibility study report of the proposed incorporation;
7. Contract and articles of association of the joint venture.
Tannet’s Services
Feasibility Study/Market Entry Research/Due Diligence;
Company Formation;
Bank Account Opening (Hong Kong/Offshore Account);
Accounting, Auditing, and Tax Filing;
Global Barcodes Application (Overseas Barcodes Recordation);
Intellectual Property Service (trademark, patent and copyright);
Staff Recruitment and Payroll Management;
Ready-made Company;
Company Deregistration.
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 tannet-solution@hotmail.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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