CHINESE-FOREIGN COOPERATION JOINT VENTURE
A Chinese-foreign cooperative
joint venture refers to an economic entity jointly established
within the Chinese territory by a foreign company, enterprise
or other economic organization or individual and a Chinese
company, enterprise or other economic organization or
individual according to the cooperative joint venture
contract between the two parties. It is a contractual
joint venture. The parties to a Chinese-foreign cooperative
joint venture shall provide in the cooperative joint venture
contract for matters such as investment or cooperation
conditions, rights and obligations, the division of earnings,
the sharing of risks and debts, the form and method of
business operation and management and the ownership of
property upon termination of the cooperative joint venture.
CHINESE-FOREIGN EQUITY JOINT VENTURE
A Chinese-foreign equity joint
venture refers to an enterprise jointly established
within the Chinese territory by a foreign company, enterprise
or other economic organization or individual and a Chinese
company, enterprise or other economic organization or
individual. A Chinese-foreign equity joint venture is
a limited liability company and has the status of a
Chinese legal person. The Chinese and foreign parties
are liable for its debt and share its right and interest
to the extent of the amount of capital contributed by
them and in proportion to their capital contributions.
Chinese law protects its rightful business activities.
The proportion of the foreign parties contribution to
the registered capital shall be no less than 25 percent.
WHOLLY FOREIGN OWNED ENTERPRISE
A wholly foreign-owned enterprise,
also called foreign enterprise, refers to an enterprise
established within the Chinese territory in accordance
with relevant Chinese laws and with all the capital
being invested by a foreign company, enterprise or other
economic organization or individual. A foreign enterprise
has the status of a Chinese legal person and is a limited
liability company. A foreign enterprise shall take all
rises and shall possess all profits.
COMPENSATION TRADE
On the basis of credit, the
foreign party provides the Chinese party with capital
or equipment, technology and raw material and undertakes
to buy a certain quantity of products from the Chinese
party. The Chinese party compensates in installment
the foreign party directly or directly, i.e. uses products
manufactured with the equipment and technology provided
by the foreign party or other products agreed upon with
the foreign party to repay in installment the equipment
and interest.
INWARD PROCESSING OR ASSEMBLING
Inward processing or assembling
refers to processing or assembling with materials, components
or samples provided by foreign enterprises, i.e. A foreign
business provides raw materials, auxiliary materials,
parts, components or drawings, a Chinese business processes
them or assembles them into finished products which
are returned to the foreign party for marketing, and
the Chinese party charges a fee for the processing.
The foreign party may also provide production equipment
with or without a price and fund for building the plant
premises; the Chinese party collects a processing fee.
The production equipment with a price provided by the
foreign party shall be paid by the Chinese party in
installment using the processing fee.
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