Rules for the Implementation of the Law of People's Republic of China on Chinese-foreign Contractual Joint Ventures
Rules for the Implementation of the Law of People's Republic of China on Chinese-foreign Contractual Joint Ventures
Rules for the Implementation of the Law of People's Republic of China on Chinese-foreign Contractual Joint Ventures
Order of the Foreign Trade and Economic Cooperation [1995] No.6
September 4, 1995
Chapter I General Provisions
Article 1 These rules have been formulated in accordance with the Law of the People's Republic of China on Chinese-foreign Contractual Joint Ventures.
Article 2 The establishment of Chinese-foreign Contractual Joint Ventures (hereinafter referred to as joint ventures) in the territories of China shall be in line with the country's development and industrial policies as well as regulations guiding foreign investment in China.
Article 3 The joint ventures can, according to the law, independently undertake their operations and management and business activities within the limits as set under the approved agreements, contracts and articles of associations of the ventures without interference from any organizations or individuals.
Article 4 The joint ventures referred to here include those with and without Chinese legal person status. Special provisions in Chapter 9 of these Rules shall be followed by joint ventures without Chinese legal person status.
Article 5 Departments in charge of the Chinese operators shall be in charge of the joint ventures. If a joint venture has two or more Chinese operators, the examination and approval departments shall, with consultations with other related departments, designate one specific department in charge for the administration of the joint venture, unless otherwise stipulated under the law or other administrative rules and regulations.
The departments in charge of the joint venture shall provide consultation and assistance in related affairs of the joint ventures.
Chapter II Establishment of the Joint Ventures
Article 6 The establishment of a joint venture shall have the approval of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) or other departments and local governments authorized by the State Council.
The establishment of joint ventures in the following occasions shall be examined and approved by the departments or local governments authorized by the State Council:
1. The total investment to the venture is within the range of those that should be examined and approved by the departments or local governments authorized by the State Council;
2. The capital has been raised by the applicants themselves and whose construction and production facilities do not need to be balanced by the State.
3. The export of its products does not need a quota or export license from departments in charge of the State, or when a quota or export license is needed, the export has been approved in advance by related departments in charge of the State prior to the submission of the project proposal.
4. Other circumstances that should be examined and approved by the departments or local governments authorized by the State Council as set under the law and administrative rules and regulations.
Article 7 The following documents shall be presented by the Chinese partners in applying for the establishment of a joint venture.
1. project proposal of the joint venture together with the approval documents of department in charge;
2. the feasibility study report as prepared by all sides involved in the joint venture, together with approval documents of departments in charge;
3. the joint venture's agreements, contracts and articles of association as signed by the cooperators' legal representatives or authorized representatives;
4. the partners' business licenses, registration documents, capital credibility reports and other valid documents of the legal representatives. If a partner is a foreign natural person, the partner shall also present valid documents on its identification, biographical data and capital credibility;
5. a roster of the Chairman and Deputy Chairmen of the Board of Directors, members of the Board of Directors or a name list of the Chairman and Deputy Chairmen of the Joint Management Committee and members of the Joint Management Committee;
6. other documents as deemed necessary by the examination and approval departments.
The previously listed documents, except documents submitted by the foreign partners as stated in item 4, shall have Chinese versions. Documents stated in items 2, 3 and 5 might also have copies in another foreign language as agreed upon by partners of the proposed joint venture.
The examination and approval departments shall decide whether or not approve the establishment within 45 days since the date when all necessary documents are received. In case the examination and approval departments decide that a certain document submitted is incomplete or with inappropriate contents, the departments have the right to request a revision or amendment within a certain period of time.
Article 8 The approval documents shall be issued by the MOFTEC if the joint ventures are approved by the MOFTEC or departments authorized by the State Council.
The approval documents of joint ventures approved by the local governments shall be issued by the approving local governments and be registered with the MOFTEC for the record within 30 days following the date of approval.
The joint ventures established after approval shall register with the administrative departments in charge of industry and commerce and apply for business licenses.
Article 9 Applications on the establishment of joint ventures will not be approved in one of the following occasions:
1. The proposed joint venture would make harm to China's sovereignty or social welfare;
2. The proposed joint venture would make harm to China's national security;
3. The proposed joint venture would cause pollution to the environment;
4. Other occasions those are against the laws or administrative rules and regulations and the State's industrial policy.
Article 10 The joint venture cooperation agreements referred to in this set of detailed rules are the written document jointly formulated by the partners of the joint ventures on the ventures' principles and other major matters.
The joint venture contracts referred to in this set of detailed rules are the written documents jointly formulated by the partners of the joint ventures on the rights and obligations between the partners.
The joint venture articles of association referred to in this set of detailed rules are the written documents jointly formulated by the partners of the joint venture on the organization, operation and management and other matters of the venture in accordance with the contracts.
If there are discrepancies between the joint venture's cooperation agreement and its articles of association on the one hand and the contract on the other hand, the stipulations in the contract shall be followed.
The partners of the joint venture may choose not to formulate a cooperation agreement.
Article 11 The joint ventures' agreements, contracts and articles of association shall enter into force as of the date of the issuance of the establishment approval documents by the examination and approval departments.
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