All activities of a joint venture shall abide by the laws, decrees and relevant regulations of People's Republic of China (PRC). Article 3 The agreements, contracts and articles of association of the joint venture signed by the parties to the joint venture shall be submitted to the People's Republic of China (PRC) and the Foreign Investment Management Committee, which shall decide whether to approve or not within three months. After approval, the joint venture shall register with People's Republic of China (PRC) State Administration for Industry and Commerce, obtain a business license and start business. Article 4 A joint venture is a limited liability company.
In the registered capital of a joint venture, the proportion of foreign investment is generally not less than 25%.
The parties to the joint venture shall share the profits, risks and losses in proportion to the registered capital.
The transfer of the registered capital of a joint venture must be approved by all parties to the joint venture. Article 5 The parties to a joint venture may invest in cash, in kind, industrial property rights, etc.
The technology and equipment invested by foreign joint ventures must be truly advanced technologies and equipment that meet the needs of China. If you deliberately cheat with backward technology and equipment, causing losses, you should compensate for the losses.
The investment of a joint venture in China may include the right to use the site provided to the joint venture during its operation. If the right to use the site is not part of the investment of the China joint venture, the joint venture shall pay the use fee to the China Municipal Government.
The above investment shall be stipulated in the contract and articles of association of the joint venture, and the price (except the site) shall be determined by the parties to the joint venture through consultation. Article 6 A joint venture shall have a board of directors, whose composition shall be determined by the parties to the joint venture through consultation in the contract and articles of association, and shall be appointed and replaced by the parties to the joint venture. The board of directors shall have a chairman, who shall be the Chinese joint venture; One or two vice-chairmen shall be held by foreign-funded enterprises. Major issues handled by the board of directors shall be settled by the parties to the joint venture through consultation on the basis of equality and mutual benefit.
The principle of consultation and decision.
The authority of the board of directors is to discuss and decide all major issues of the joint venture in accordance with the articles of association of the joint venture: enterprise development plan, production and operation activity plan, revenue and expenditure budget, profit distribution, labor and salary plan, suspension of business, appointment or employment of general manager, deputy general manager, chief engineer, chief accountant and auditor, as well as their authority and treatment.
The deputy general manager (or deputy director) shall be held by each party to the joint venture.
The employment and dismissal of the staff and workers of a joint venture shall be stipulated in the agreement and contract of the parties to the joint venture according to law. Article 7 The gross profit obtained by a joint venture shall be deducted from the reserve fund, employee bonus and welfare fund and enterprise development fund stipulated in the articles of association of the joint venture after the joint venture income tax is paid in accordance with the tax laws of People's Republic of China (PRC) and the state, and the net profit shall be distributed in proportion to the registered capital of each party to the joint venture.
A joint venture with advanced technology in the world may apply for income tax reduction or exemption in the first two to three years when it begins to make profits.
When a foreign joint venture reinvests its net profit in China, it may apply for a refund of part of the income tax it has paid. Article 8 A joint venture shall open an account with a bank approved by Bank of China or Bank of China.
Foreign exchange matters of a joint venture shall be handled in accordance with the Regulations of People's Republic of China (PRC) Municipality on Foreign Exchange Control.
A joint venture may directly raise funds from foreign banks in its business activities.
All insurances of a joint venture shall be insured with insurance companies in China. Article 9 The production and operation plan of a joint venture shall be reported to the competent department for the record and executed through an economic contract.
The raw materials, fuels and accessories required by a joint venture shall be purchased in China as far as possible, or directly purchased by the joint venture in the international market with self-raised foreign exchange.
Joint ventures are encouraged to sell products outside China. The export products can be directly sold to foreign markets by the joint venture or its relevant entrusted institutions, and can also be sold through foreign trade institutions in China. Joint venture products can also be sold in China market.
When necessary, a joint venture may set up branches outside China. Article 10 The net profits, funds and other funds shared by foreign parties after fulfilling their obligations stipulated in laws, agreements and contracts may be remitted abroad through the Bank of China in accordance with the provisions on foreign exchange control.
Foreign investors are encouraged to deposit the remitted foreign exchange into the Bank of China. Article 11 The wages and other lawful incomes of foreign employees of a joint venture may be remitted abroad through the Bank of China according to the regulations on foreign exchange control after paying individual income tax according to the tax laws of People's Republic of China (PRC) and the state. Article 12 The term of a joint venture contract may be determined by the parties to the joint venture according to different industries and circumstances. After the expiration of the joint venture contract, the term may be extended with the consent of the parties to the joint venture and the approval of People's Republic of China (PRC) and the Foreign Investment Management Committee. The application for extending the contract term shall be submitted six months before the expiration of the contract.