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Investment Guide

2015-09-07 13:40:15

Foreign-funded enterprises


1. What legal investing forms are there in China?


Foreign investors could use exchangeable currency, or assessment for machinery equipments, industrial property, and expertise to invest. After audio organ's approval, the foreign tradesman could also fund the money they profit from other companies they invest in China.


2. What aspects are involved to machinery equipment investment?


The machinery equipments which would be assessed by foreign investors have to be the necessities in manufacturing, and its assessment should be no more than the normal price of other counterparts in worldwide market. As part of the attachment, an assessment list, including name, kind, amount, and price, for those machinery equipment should be delivered to audio organ. When the assessing achinery equipments reach China port, the foreign enterprise need to requests China’s commercial inspection body to do a verification and provide a check-up report.


3. What is the foreign investing time limit?


Foreign investment contribution time limit should be declared both in the foreign enterprise application and foreign enterprise regulation, which could be dealt by installments, but the last portion has to be paid in 3 years after the business license is issued and the first portion in 90 days after the business license is issued with the amount no less than 15% of the total agreed investment. Each time an installment is contributed, the foreign enterprise needs to request China’s certified public accountant to make an verification and provide capital verification report, deliver it to some audio organ and industrial commerce and administration institution for archiving.


4. What happen to overdue fund contribution?


For those who can not contribute the first or other installments in 30 days after the required date without justified reasons, their enterprise approval certification will automatically fail. The foreign enterprise needs to write-off and revoke the business license in industrial commerce and administration institution, or the industrial commerce and administration institution will withdraw the enterprise's business license and make an announcement.


5. How to postpone the fund legally?


As what our law regulates, foreign investors who request to postpone the fund with justified reasons still have to be approved by audio organs and reports to industrial commerce and administration institution for archiving.


6. What organizing forms can be used by foreign enterprise?


Foreign enterprise's organizing forms could be limited liability corporation or other corporations if authorized. If it is limited liability corporation, that means the foreign investor's obligation for the enterprise would be no more than the agreed investing fund. If it is other corporation form, the foreign investor's obligation should obey China's law and regulations. Other corporation form includes limited corporation, partnership and exclusive management, etc. Applying for other corporation forms has to be audited by the People's government of local provincial, municipal, autonomous region, plan 
municipality, or special economic zone and approved by Ministry of Foreign Trade and Economic Cooperation.


7. How to define the proportion of registered capital and total fund?


Registered capital in foreign enterprise means the registered fund for establishment in the industrial commerce and administration institution or the all agreed investment fund by foreign investors. Total investment fund means all contributed fund of running the enterprise, which includes the fundamental construction fund in manufacturing and circulating capital. Registered capital of the foreign enterprise should be compatible to the operation scope, the proportion of registered capital and total fund should refer to Provisions for Registered Capital & Total Fund in China-Foreign Joint Ventures.


 8. How to change and transfer the registered capital?


Foreign enterprise can not decrease the registered capital during the operation. Those who have to decrease the registered capital with the vary of total investment amount and manufacturing scope have to get the approval from audio organs. Increasing or transferring the registered capital has to get the approval of audit organs and experience the capital changing procedure in industrial commerce and administration institution. Separating and merging foreign enterprise or changing the foreign enterprise's capital has to get the approval of audio organs and capital verification report from China's certified public accountant. After audit organ's approval, foreigner enterprise has to experience the changing procedure in industrial commerce and administration institution. Also, mortgaging or transferring enterprise's property, rights and interest has to get the approval of audio organs and report to industrial commerce and administration institution for archiving.