The proportion of reserve fund, enterprise development fund and employee bonus and welfare fund of a foreign-invested enterprise shall be decided by the board of directors of the enterprise or stipulated in the contract. Among them, foreign-invested enterprises are not allowed to withdraw enterprise development funds, and the withdrawal ratio of their reserve funds shall not be less than 10% of after-tax profits. When the withdrawal amount reaches 50% of the registered capital, it shall not be withdrawn.
With the approval of the joint venture examination and approval authority, the "reserve fund" can be used to increase the capital and expand production of the joint venture. The "enterprise development fund" can be used to purchase fixed assets, increase liquidity and expand the production and operation of enterprises. Part of the "Employee Reward and Welfare Fund" is used for non-recurrent rewards of employees such as advanced producer awards, invention awards and year-end awards, and part of it is allocated to the trade union of this enterprise for collective welfare expenditures such as building employee dormitories. Reserve funds and development funds set up detailed account accounting under the "surplus reserve" account. Employee bonus and welfare funds are accounted for under the detailed account of "welfare expenses payable-employee bonus and welfare extracted from after-tax profits".