Investment policies
Article 7. When applying for the establishment of a joint venture, the Chinese and foreign participants in the joint venture shall jointly submit the following documents to the examination and approval authority:
1) Application for the establishment of a joint venture;
2) The feasibility study report jointly prepared by the participants;
3) Joint venture agreement, contract and articles of association signed by the representatives authorized by the participants;
4) List of candidates for chairman, vice-chairman and directors appointed by the participants; and
5) Other documents stipulated by the examination and approval authority.
The aforesaid documents shall be written in Chinese. Documents (2), (3) and
(4) may be written simultaneously in a foreign language agreed upon by the participants. Both versions are equally authentic.
Should anything inappropriate be found in any of the documents submitted, the examination and approval authority shall demand an amendment to it within a limited time.
Article 8. Upon receipt of the documents stipulated in Article 7 of these Regulations, the examination and approval authority shall, within three months, decide whether to approve or disapprove them.
Article 9. The applicant shall, within one month after receipt of the certificate of approval, register with the administrative bureau for industry and commerce (hereinafter referred to as registration and administration office) in accordance with the relevant provisions of the state. The date on which its business license is issued shall be regarded as the date of the establishment of a joint venture.
Article 10. The "joint venture agreement" mentioned in these Regulations refers to a document agreed upon by the parties to the joint venture on some main points and principles governing the establishment of a joint venture.
"Joint venture contract" refers to a document agreed upon and concluded by the parties to the joint venture on their rights and obligations."Article of association" refers to a document agreed upon by the parties to the joint venture indicating the purpose, organizational principles and method of management of a joint venture in compliance with the principles of the joint venture contract.
If the joint venture agreement conflicts with the contract, the contract shall prevail.
If the parties to the joint venture agree to sign only a contract and articles of association, the agreement can be omitted.
Article 11. The joint venture contract shall include the following main items:
(1) The names, the countries of registration, the legal address of parties to the joint venture, and the names, professions and nationalities of the legal representatives thereof;
(2) Name of the joint venture, its legal address, purpose and the scope and scale of business;
(3) Total amount of investment and registered capital of the joint venture, investment contributed by the parties to the joint venture, each party's investment proportion, forms of investment, the time limit for contributing investment, stipulations concerning incomplete contributions, and assignment of investment;
(4) The ratio of profit distribution and losses to be borne by each party;
(5) The composition of the board of directors, the distribution of the number of directors, and the responsibilities, powers and means of employment of the general manager, deputy general manager and high-ranking management personnel;
(6) The main production equipment and technology to be adopted and their source of supply;
(7) The ways and means of purchasing raw materials and selling finished products;
(8) Principles governing the handling of finance, accounting and auditing;
(9) Stipulations concerning labor management, wages, welfare, and labor insurance;
(10) The duration of the joint venture, its dissolution and the procedure for liquidation;
(11) The liabilities for breach of contract;
(12) Ways and Procedures for settling disputes between the parties to the joint venture;
(13) The language used for the contract and the conditions for putting the contract into force.
The annex to the contract of a joint venture shall be equally authentic with the contract itself.
