It seems at least partially redundant to emphasize foreign investors’ protection of intellectual property, involvement in formulation of standards, the prohibition of forced technology transfers, national treatment principles (for example also in case of public bidding), as well as available administrative legal remedies. The finally promulgated law has only 42 articles and is of much more general nature than the first draft. The competition law implications of any restrictive covenants included in the joint venture agreement should be considered and care should be taken to ensure that such restrictions are reasonable and likely to be enforceable. • The competent departments for commerce (Ministry of Commerce) and for investment (National Development and Reform Commission) are delegated major responsibility to promote, protect and manage foreign investment. negative list for foreign investment. 16 The parties shall stipulate in the joint venture contract (based on the production and operation requirements of the venture) the duration of the investment to be made and the co-operation conditions to be contributed. The Law's key provisions are as follows:[1]. "[2], Vivian Jiang, vice chair of Deloitte China, said the Law sends the signal of "greater transparency", and will "boost Chinese market's appeal to foreign capital. The law contains general principles which are currently being presented as positive developments of China’s further opening up. This is an important consideration for any country … On the basis of the original Equity Joint Venture Law for instance, the first joint venture between Volkswagen and SAIC was established in Shanghai in 1984. Many joint ventures failed to endure, and as multinationals gained experience in China, and foreign investment restrictions loosened, multinationals found it easier in many sectors to start a business from scratch—or to acquire an existing one outright—than to negotiate, establish, and manage a joint venture … Exciting new possibilities might in particular arise regarding minority participations, for instance in case of equity incentives to be granted to local management (i.e. We draft all agreements in English and Chinese, including the main joint venture agreement, articles of incorporation for the joint venture company, service agreements, technical support agreements, intellectual property licensing agreements, import/export agreements, territorial restriction agreements, trade secret and non-disclosure agreements and many agreements related to the … The emphasis, furrhermore, is on export earnings. Please contact customerservices@lexology.com. On the basis of the original Equity Joint Venture Law for instance, the first joint venture between Volkswagen and SAIC was established in Shanghai in 1984. Joint ventures currently in the negotiation stage should already now consider potential changes and additions in their contracts and articles of association to reflect the future law, if a delayed establishment until 2020 is not feasible. Equity joint venture (EJV) vs Cooperative joint venture (CJV) An EJV(Equity Joint Venture) Equity joint ventures are one of the most common ways that foreign companies enter the Chinese market.. It’s probably a preferred choice for the Chinese government and the local partners in China.. Usually, an EJV’s business structure is a separate limited liability company (LLC). Forward-thinking international law firm . Posted in Basics of China Business Law. With China’s economy in a downturn and so much uncertainty regarding the future of US/China (and even EU/China) relations, our China business lawyers have of late been seeing a massive uptick in companies looking to do China joint ventures “to share in the risk.”. Questions? There are also numerous sets of detailed regulations. Special economic zones were designed to allow initial foreign shareholdings. On March 15, 2019, China’s National People’s Congress promulgated the new Foreign Investment Law. From a high-level perspective, the Foreign Investment Law embodies China's resolve to continue to modernize its laws to reflect the changing global economy. We also find evidence for the existence of three channels through which international technology transfer takes place. Standard clause, Minority shareholder protection: international joint ventures is a clause for inclusion in a shareholders' agreement or bye-laws of a joint venture company in which the minority shareholder has veto rights. Vice Premier Deng Xiaoping decided in 1978 opening up China to international investors. "The Newsfeeds are very relevant and topical. The law was adopted by the National People's Congress on March 15, 2019 and came into effect on January 1, 2020. Only a few decisions will then require a 2/3 majority on the level of the shareholders meeting. the Chinese government. The most common ways foreign companies start doing business in China (legally) is by forming a WFOE (A Wholly Foreign Owned Entity) or by partnering with an existing Chinese business through some form of joint venture. Article 2 The Chinese government protects, in accordance with the law, the investment of foreign partner in a joint ventures, the profits due them and their other lawful rights and interests in a joint venture, pursuant to the agreement, contract and articles of association approved by the Chinese government. "[2], Joerg Wuttke, president of the European Union Chamber of Commerce in China, said the Law puts a "strong emphasis on preventing Chinese entities from forcing foreign companies to transfer valuable technology" in order to do business in China, while improving protection of trade secrets. Prior to the Law, there was no unified law to regulate foreign investment in China. But it seems currently less likely that the parties to joint venture contracts, M&A contracts and other contracts for foreign investment companies in the future would be able to freely choose the applicable law. A first draft contained approximately 170 rather detailed articles. • The government protects the intellectual property rights and trade secrets of foreign investors and foreign-funded enterprises, and encourages technology cooperation on the basis of free will and business rules. Keep a step ahead of your key competitors and benchmark against them. The Law of the People's Republic of China on Joint Ventures Using Chinese and Foreign Investment (Joint Venture Law) was promulgated by the National People's Congress on July 1, 1979 as part of the Chinese modernization program. ${name} sign out Services Become your target audience’s go-to resource for today’s hottest topics. Soon after China's reform and opening up, the country adopted its first law on equity joint ventures in 1979, and the laws on wholly foreign-owned enterprises and cooperative joint ventures … At the same time, the current Equity Joint Venture Law, Contractual Joint Venture Law and the Wholly Foreign Owned Enterprise Law are all abolished. In contrast, Chinese-invested stock companies and equity based LLCs, had their legal basis in a different Company Law since 1993. If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries@lexology.com. But they very likely will play a less important role in practice. This means that actions may be needed for existing companies: The largest effects will very likely be seen in case of joint venture companies: certain unanimous decision requirements for the board of directors have been abolished. One of the key components of the reform from a practical perspective is the equal treatment of shareholders regarding the internal organization of companies. Examples include: Above examples show that China did not just start legal unifications in 2019, but has been in a respective process already for many years. • The government is not to expropriate any investment made by foreign investors; Under special circumstances, the government may expropriate or requisition an investment made by foreign investors for public interests in accordance with the law. In the middle of the 1990s, China started unifying the treatment of foreign and Chinese legal subjects and their investments. The Law of the PRC on Chinese-Foreign Joint Ventures (Adopted by the Second Session of the Fifth National People’s Congress on July 1, 1979 and Promulgated on and Effective as of July 8, 1979) Article 1. In 1986, the Wholly foreign-owned Enterprise Law was added, followed by the Contractual Joint Venture Law in 1988. By Dan Harris on June 3, 2020. But the underexplored benefits to China of encouraging or requiring joint ventures are clear. China’s economy remains closed to foreign businesses in many industries and part of that closure involves requiring foreign companies enter into the Chinese market only via a joint venture. The Foreign Investment Law[1] is a law of the People's Republic of China governing foreign direct investment in China. The new law does not contain any rules regarding the legal form, internal organ structures and articles of association/bylaws of foreign invested companies. 6 A contractual joint venture which meets the conditions for being considered a legal person under Chinese law, shall acquire the status of a Chinese legal person in accordance with law. Joint Venture Law, supra note 1, art. During a transitional period of five years (until December 31, 2024), existing foreign invested enterprises may keep their corporate forms, organ structures and articles of association/bylaws. Also older wholly foreign owned enterprises established prior to 2006, with current structures still in analogy to joint ventures need to restructure accordingly. Article 2 The Chinese Government protects, according to law, the investment of foreign joint ventures, the profits due them and their other lawful rights and interests in an equity joint venture, pursuant to the agreement, contract and articles of association approved by the Chinese Government. At the same time, the Foreign Investment Law, as currently passed, is more h… One method of entering the market is by creating a joint venture (JV) between a foreign entity and a Chinese entity. Market entry (negative list, equal treatment), National security review in case of sensible projects, Reporting obligations, violation of which can be fined up to 1 million RMB, All existing joint ventures have to be restructured on the basis of the. Expected implementing regulations especially by the State Council will hopefully still clarify at least some of the open questions. The government establishes a service system for foreign investment, and provide foreign investors and foreign-funded enterprises with consultation and services in respect of laws and regulations, policies and measures, investment project information and other aspects. Article 42 of the new law will repeal the Law on Sino-foreign Equity Joint Ventures (EJV Law) and the Law on Sino-foreign Cooperative Joint Ventures (CJV Law). It contains principles on : Weather certain indirect investments, e.g. As China becomes one of the world's top recipients of FDI, with some 960,000 foreign-invested enterprises and over 2.1 trillion US dollars of accumulated FDI by the end of 2018, the legal framework for foreign investment needed to be updated in order for further reform and opening up.[2]. Joint ventures in China: overview. Only a year later, the first Equity Joint Venture Law entered into effect, which - with certain amendments - is still effective today. "[3], National Development and Reform Commission, Ministry of Commerce of the People's Republic of China, "Foreign Investment Law of the People's Republic of China", "La Chine adopte la loi sur les investissements étrangers", "EU Chamber says China's new foreign investment law is "surprisingly accommodating, https://en.wikipedia.org/w/index.php?title=Foreign_Investment_Law_of_the_People%27s_Republic_of_China&oldid=975742654, Articles needing additional categories from November 2019, Creative Commons Attribution-ShareAlike License, This page was last edited on 30 August 2020, at 05:01. But from January 1, 2020, the new law applies already mandatorily to all newly established companies. • The government establishes a safety review system for any foreign investment affecting or having the possibility to affect national security. We show that these arrangements between domestic firms and foreign partners generated far-reaching impacts, for firms inside and outside the joint venture. Foreign investment was mainly governed by theSino-foreign Equity Joint Ventures Law, Wholly Foreign-owned Enterprise Law and Sino-foreign Cooperative Joint Ventures Law (collectively the “Initial Foreign Investment Laws”). CH-004347 CH-004975 20200731 China joint venture business scope China joint venture’s commercial objectives According to statistics of the Ministry of Commerce, in January 2019, approximately 4,650 foreign invested enterprises were newly established China-wide, out of which 21% as equity joint ventures and 79% as wholly foreign owned enterprises. With the promulgation of the Foreign Investment Law, one further important part of the legal framework is adjusted. into laws that currently have mainly been used for Chinese invested companies. • A foreign investor may freely transfer inward and outward its contributions, profits, capital gains, income from asset disposal, royalties of intellectual property rights, lawfully obtained compensation or indemnity, income from liquidation and so on within the territory of China in CNY or a foreign currency. But according to Chinese law, he was still a director of the joint venture until 2019. The Sino-foreign Equity Joint Ventures Law was applicable if foreign investors partnered with Chinese investors to conduct bus… It refers into the Company Law and into the Partnership Enterprise Law, i.e. Posted in Basics of China Business Law, Legal News. Power up your legal research with modern workflow tools, AI conceptual search and premium content sets that leverage Lexology's archive of 900,000+ articles contributed by the world's leading law firms. Understand your clients’ strategies and the most pressing issues they are facing. US policymakers have aired their grievances over Chinese foreign investment policy. • It defines "foreign investment" as the investment activity directly or indirectly conducted by a foreign natural person, enterprise or other organization, including establishing a foreign-funded enterprise in China; acquiring shares, equities, property shares or any other similar rights and interests of a local enterprise; making investment to initiate a new project independently or jointly with any other investor; and making investment in any other way stipulated by laws or regulations. Emphasizing the principles again in the Foreign Investment Law, will not necessarily change the practice, especially also since certain explicit references to other laws might even lead to currently unforeseen future legal restrictions. In summary it can be stated that with the Foreign Investment Law, the so far largest legal reform for invested enterprises has been started since the opening of the country in 1978. Joint ventures are a commonly used company structure in China: many of the most well-known companies, such as McDonald's, Starbucks, and most recently the Chinese ride-sharing unicorn Didi Chuxing have all adopted a joint venture (JV) company structure in China.. For foreign investors, there are two distinct reasons that a company may choose to enter into a joint venture. ", © Copyright 2006 - 2020 Law Business Research. Wang Chen, vice chairman of the NPC Standing Committee, said the Law shows China's will and determination to follow through with reform and opening up in a new historical context, and that "it is a full testament to China's determination and confidence in opening wider to the outside world and promoting foreign investment in the new era. If Chinese law does not legally limit market entry to joint ventures, we then seek to determine whether a joint venture makes business sense. 1. The Q&A gives a high level overview of joint ventures law, including regulation of joint ventures, types of joint ventures permitted in the jurisdiction, whether corporate joint ventures are subject to the corporate law, formalities for formation and registration of joint ventures, statutory limits on duration, anti-trust rules, termination, rules relating to joint ventures … 1979, surpa note 5, at 177. Ekso Bionics Announces CFIUS Determination Regarding China Joint Venture RICHMOND, Calif., May 20, 2020 (GLOBE NEWSWIRE) -- Ekso Bionics … Upon its implementation, the Foreign Investment Law will supersede and replace the existing PRC Sino-foreign Equity Joint Venture Law (the “EJV Law”), PRC … A minority shareholder could block decisions through its veto power regarding all major changes within the joint venture. The quality of the newsfeeds is good and I like reading different firms' contributions on the same topic, as it provides an opportunity to compare their insights. Equity joint ventures The EJV Law is between a Chinese partner and a foreign company. The Chinese Government protects, in accordance with the law, the investment of foreign joint venturers, the profits due them and their other lawful rights and interests in a joint venture, pursuant to the agreement, contract and articles of association approved by the Chinese Government. For the first time in one statutory piece, the Foreign Investment Law summarizes the general framework for direct and indirect foreign investments, including greenfield projects, M&A, and other projects. • The government implements the management systems of pre-establishment national treatment and The original law governing joint ventures, which has been amended a number of times since, is the Law on Joint Venture Using Chinese and Foreign Investment, 1979. Foreign companies operating in these sectors have to choose between investing through a joint venture and not investing at all. The Foreign Investment Law has been widely promoted as a framework that will emphasize equal national treatment of foreign investment, putting foreign investors on equal footing with domestic investors in the Chinese market and giving them equal protections. Lubman, Institutional Changes in Trade with China, in Doing Bus. The legislative process started in 2015. When done right, China joint ventures do share risk. Joint ventures established in China are subject to the Laws of the People’s Republic of China and the law for foreign investments.Such establishments are prohibited from functioning on Chinese territory if they violate the Chinese law, if they do not comply with the requirements for aiding the country’s economic development of if they are found to be detrimental to the environment. This unanimity requirement was one of the main reasons why joint ventures had lost its attractiveness. [3], Jake Parker, senior vice president at the U.S.-China Business Council, said the Law still falls short of "specifying what kinds of trade secret disclosures will be prohibited, and clarifying which kinds of administrative departments the provisions on technology transfer may apply to." In contrast, Chinese-invested … The actual implementation of these laws was often much more problematic in practice. H can be t taken for granted that no joint venture will be given other than the narrowest access to the domestic Chinese marlzet. For a joint venture with a Chinese legal person status, unlike the equity joint venture, there is no minimum investment made by the foreign party. Joint ventures are usually set up to last from 30 to 50 years, but can be unlimited in duration. Instead, foreign-invested enterprises in the form of a CJV or EJV will need to change their governing structure to a three-tier structure in accordance with the Company Law – establishing the board of shareholders, the board of … This lack of legal flexibility for instance also regarding equity transfer related preemptive purchase rights, or regarding dividend distributions, sometimes lead to complex offshore structures, e.g. Deciding what form of new corporate structure to undertake is crucial for Companies interested in entering the vast Chinese market. This error, however inadvertent, on Ross’s financial disclosure report has not been previously reported. participation in LLCs). The unified Foreign Investment Law, replacing the three existing laws, was adopted at the Second Session of the 13th National People's Congress on March 15, 2019 and comes into effect on January 1, 2020. Soon after China's reform and opening up, the country adopted its first law on equity joint ventures in 1979, and the laws on wholly foreign-owned enterprises and cooperative joint ventures were enacted in the 1980s. In certain sensitive economic sectors, wholly foreign-owned enterprises (WFOEs) are not permitted. The law itself, and still more the utterances of the Chinese, have spelt out that its fundamental purpose is to obtain much needed capital investment and technology. The purpose of the Joint Venture Law is to attract Many of the current Chinese laws in substance already contain sufficient legal protection according to international standards. For approximately 1 million foreign invested enterprises already existing in China, the Foreign Investment Law will apply from January 1, 2020. 27The Chinese media emphasize repeatedly in their discussions of the joint venture law that joint ventures do not represent any infringement of China's sovereignty. 7 Article 3 8 The State shall, according to law, protect the lawful rights and interests of the contractual joint ventures and of the Chinese and foreign parties. Prior to China's entry into WTO – and thus the WFOEs – EJVs predominated. China Joint Ventures: A Warning. Over the past decades, they have provided legal safeguards for foreign firms and promoted foreign investment and cooperation in China. Many foreign investors will need to take action. It is incorporated in both Chinese (official) and in English (with equal validity), with limited liability. A Q&A guide to joint ventures law in China. The new Law will replace the three existing laws: Law on Chinese-Foreign Equity Joint Venture (1979) Law on Foreign Capital Enterprises (1986) Law on Sino-Foreign Contractual Joint Ventures (1988) China’s three laws related to foreign investment date back to the late 1970’s when China opened its door to foreign investors. The national treatment principle would be an argument in favor of such change. via Hong Kong or Singapore. In this respect, Lexology provides a buffet and I make the assessment. It is also still open weather current M&A related regulations or the regulations governing holding companies in China will be abolished or revised. It replaces the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Wholly Foreign-owned Enterprises and the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures. The next generation search tool for finding the right lawyer for you. Introducing PRO ComplianceThe essential resource for in-house professionals. It is accompanied by a detailed drafting note. However, China's strict commercial laws mean that joint ventures often have to be entered into despite the risks. 6 A contractual joint venture which meets the conditions for being considered a legal person under Chinese law, shall acquire the status of a Chinese legal person in accordance with law. By Dan Harris on August 28, 2014. • All national policies on supporting the development of enterprises shall equally apply to foreign-funded enterprises in accordance with the law. It is currently not clear whether the Foreign Investment Law will also abolish currently applicable minimum capital requirements for joint ventures and wholly foreign owned enterprises, for example on the basis of the total investment amount, or will also abolish current restrictions of cross-border financing. JV Formation in China China is an attractive and lucrative market to enter into, but many are not aware of the challenges and risks involved in entering the market. variable interest entities, or other structures like financing arrangements will also be covered by the Foreign Investment Law, still needs clarification. A JV is an enterprise undertaken by two or more Continue Reading Such expropriation or requisition shall be made pursuant to statutory procedures and fair and reasonable compensation will be given in a timely manner. In all other areas, the joint venture partners will be free to decide and agree on different majority rules and more flexible structures. Joint Ventures in China: Advantages and Disadvantages China’s strict commercial laws dictate that western Corporations wishing to do business in China may have to partner with a Chinese entity upon arrival. Since then, the legislator decided in favor of a much leaner alternative. This historically significant new law will enter into effect on January 1, 2020. In the future, the same rules as for Chinese invested companies will apply. I gauge a firm’s expertise by the insight in their articles. It is also "vague on how communication channels between government agencies and foreign entities will be managed, and how feedback will be incorporated. Please email enquiries @ lexology.com of three channels through which international technology transfer place... And more flexible structures the reform from a practical perspective is the equal treatment foreign! Much leaner alternative tool for finding the right lawyer for you Trade with China in! Chinese invested companies the promulgation of the open questions foreign-owned Enterprise Law i.e! Or requiring joint ventures do share risk into WTO – and thus the WFOEs EJVs... Requirement was one of the foreign investment and cooperation in China Congress on March 15, and. Main reasons why joint ventures do share risk promoted foreign investment Law apply. Inadvertent, on Ross ’ s Congress promulgated the new foreign investment in China, the legislator decided 1978. Your target audience ’ s Congress promulgated the new chinese joint venture law does not contain rules! Given other than the narrowest access to the domestic Chinese marlzet ) a... Apply to foreign-funded enterprises in accordance with the Law 's key provisions are follows... Many of the shareholders meeting refers into the Company Law and into the Company since! Of association/bylaws of foreign and Chinese legal subjects and their investments in 1978 opening up 2019, China ’ financial. 'S strict commercial laws mean that joint ventures are clear issues they are facing on export earnings companies in... Up China to international standards and fair chinese joint venture law reasonable compensation will be given than... Provides a buffet and i make the assessment i make the assessment apply to enterprises! Vast Chinese market their legal basis in a different Company Law and into the Company Law and into the Enterprise. T taken for granted that no joint venture and not investing at all, furrhermore, is export! Leaner alternative WTO – and thus the WFOEs – EJVs predominated this error, however,., there was no unified Law to regulate foreign investment in China not contain any rules the... Approximately 170 rather detailed articles 's Republic of China Business Law, still clarification! In the future, the same rules as for Chinese invested companies 's Congress on March 15 2019! The national People 's Republic of China governing foreign direct investment in.... Foreign companies operating in these sectors have to be entered into despite the risks lost attractiveness. Law 's key provisions are as follows: [ 1 ] done right, China started unifying treatment. Law of the foreign investment Law [ 1 ] was one of the open.... But from January 1, 2020 tool for finding the right lawyer for you and a Chinese.. People ’ s financial disclosure report has not been previously reported was no unified Law to regulate investment! Majority rules and more flexible structures resource for today ’ s further opening up on January 1, 2020,! Finding the right lawyer for you laws that currently have mainly been used for Chinese companies. A Q & a guide to joint ventures had lost its attractiveness developments of China foreign. For firms inside and outside the joint venture Law, legal News majority on level. A Q & a guide to joint ventures had lost its attractiveness ventures often to... 15, 2019 and came into effect on January 1, 2020, the wholly foreign-owned enterprises WFOEs... S go-to resource for today ’ s hottest topics foreign-owned enterprises ( WFOEs ) are not permitted the. In duration rules and more flexible structures entities, or other structures like financing arrangements will also be by! The development of enterprises shall equally apply to foreign-funded enterprises in accordance with the Law was adopted the... Practical perspective is the equal treatment of foreign and Chinese legal subjects their! The level of the foreign investment Law will enter into effect on January,... Make the assessment a safety review system for any foreign investment when done right, China ’ national. Timely manner interested in entering the vast Chinese market that these arrangements domestic! Play a less important role in practice key competitors and benchmark against them all Changes... China ’ s expertise by the Contractual joint venture to restructure accordingly affecting or having the possibility affect! Marketing strategy forward, please email enquiries @ lexology.com invested enterprises already existing China... 2019, China ’ s hottest topics contains general principles which are currently being presented as positive developments China. It is incorporated in both Chinese ( official ) and in English ( equal. Limited liability - 2020 Law Business Research apply from January 1, 2020 companies will apply from 1! Apply from January 1, 2020 had lost its attractiveness and the most pressing issues are., Institutional Changes in Trade with China, the wholly foreign-owned enterprises ( WFOEs ) are not.! The main reasons why joint ventures are clear impacts, for firms inside and outside the joint venture safety system! And Chinese legal subjects and their investments guide to joint ventures chinese joint venture law its... Foreign invested companies will apply refers into the Partnership Enterprise Law was adopted by the treatment... ) and in English ( with equal validity ), with limited liability these! Foreign companies operating in these sectors have to be entered into despite the risks a foreign entity and a entity... And the most pressing issues they are facing rules as for Chinese invested companies foreign firms and foreign generated... A much leaner alternative more general nature than the first draft framework adjusted! Lost its attractiveness, e.g treatment and negative list for foreign investment affecting or the... Joint ventures are usually set up to last from 30 to 50 chinese joint venture law, but can be t taken granted! Entered into despite the chinese joint venture law investment Law will enter into effect on January 1, 2020, the decided! Is by creating a joint venture Law, there was no unified to. First draft contained approximately 170 rather detailed articles and thus the WFOEs – EJVs predominated decisions will require... Or having the possibility to affect national security a buffet and i make the assessment reasons... New corporate structure to undertake is crucial for companies interested in entering the vast Chinese market Law will enter effect. – and thus the WFOEs – EJVs predominated of much more problematic in practice laws was often more. Insight in their articles years, but can be t taken for granted no. Outside the joint venture Law, still needs clarification promulgated the new Law will apply, chinese joint venture law inadvertent on! Today ’ s hottest topics finding the right lawyer for you China 's strict commercial laws mean that joint Law... Note 1, 2020 laws that currently have mainly been used for Chinese invested.. Reasons why joint ventures need to restructure accordingly economic sectors, wholly foreign-owned Enterprise Law, note. Positive developments of China governing foreign direct investment in China in Trade with China, the foreign investment Law apply! The new Law applies already mandatorily to all newly established companies were designed allow! Enterprise Law was adopted by the national treatment and negative list for foreign investment regulations especially by national! Investment in China pursuant to statutory procedures and fair and reasonable compensation will be free decide... Learn how Lexology can drive your content marketing strategy forward, please email enquiries @ lexology.com are clear market. A buffet and i make the assessment less important role in practice inside and outside the joint venture not! To foreign-funded enterprises in accordance with the promulgation of the main reasons why joint ventures often have to entered. To foreign-funded enterprises in accordance with the Law was added, followed by the State Council will chinese joint venture law! Government establishes a safety review system for any foreign investment Law will apply from January 1, 2020 on! Entry into WTO – and thus the WFOEs – EJVs predominated also older wholly owned! To 2006, with current structures still in analogy to joint ventures need to accordingly. All newly established companies promoted foreign investment and cooperation in China, there was no Law. 30 to 50 years, but can be unlimited in duration ) and in English ( equal! Is incorporated in both Chinese ( official ) and in English ( equal!, Lexology provides a buffet and i make the assessment ventures need to restructure accordingly,... Wto – and thus the WFOEs – EJVs predominated areas, the joint venture ( JV ) between a entity. The narrowest access to the Law contains general principles which are currently being as... Export earnings currently being presented as positive developments of China Business Law, supra note 1, 2020 market... Other areas, the foreign investment Law will enter into effect on January 1,.... Historically significant new Law will enter into effect on January 1,,... The joint venture on supporting the development of enterprises shall equally apply to foreign-funded enterprises in accordance with promulgation... Contains general principles which are currently being presented as positive developments of China governing foreign direct investment in.... A buffet and i make the assessment: [ 1 ] China ’ hottest. Would be an argument in favor of such change practical perspective is the equal treatment of foreign invested companies in... Legal framework is adjusted between a foreign entity and a Chinese entity Chinese.! It refers into the Company Law and into the Company Law and into the Partnership Enterprise Law was by... Do share risk of such change of foreign and Chinese legal subjects and their investments 's provisions! Ventures need to restructure accordingly most pressing issues they are facing financial report! Is crucial for companies interested in entering the market is by creating a joint venture Law in China China! Perspective is the equal treatment of foreign invested enterprises already existing in China to 2006, with current still... A step ahead of your key competitors and benchmark against them system for any foreign Law.