PROVISIONAL REGULATIONS FOR THE PROPORTION OF
REGISTERED CAPITAL TO TOTAL AMOUNT OF INVESTMENT OF
JOINT VENTURES USING CHINESE AND FOREIGN INVESTMENT

  (Promulgated by the State Administration
of Industry and Commerce on March 1, 1987)

 

SUBJECT: EQUITY JOINT VENTURES

ISSUING-DEPT: STATE ADMINISTRATION OF INDUSTRY & COMMERCE

ISSUE-DATE: 03/01/1987

IMPLEMENT-DATE: 03/01/1987

LENGTH: 548 words

TEXT:

[Article 1] These Regulations are formulated in accordance with the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures and the Detailed Regulations for the Implementation of the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures in order to clarify the proportion of registered capital to the total amount of investment of Chinese-foreign equity joint ventures.

[Article 2] The registered capital of a Chinese-foreign equity joint venture shall be suitable to the scale and scope of production and operation.ÙÙ The parties to the joint venture shall share profits and bear risks and losses according to the proportion of registered capital.

[Article 3] The proportion of registered capital to the total amount of investment of a Chinese-foreign equity joint venture shall comply with the following provisions:

(1) If the total amount of investment of a Chinese-foreign equity joint venture is less than US!g3 million (including US!g3 million), its registered capital shall be at least 7/10 of the total investment.

(2) If the total amount of investment of a Chinese-foreign equity joint venture is from US!g3 million to US!g10 million (including US!g10 million), the registered capital shall be at least one-half of the total amount of investment; within this, if the total amount of investment is less than US!g4.2 million, the registered capital shall not be less than US!g2.1 million.

(3) If the total amount of investment of a Chinese-foreign equity joint venture is from US!g10 million to US!g30 million (including US!g30 million), the registered capital shall be at least 2/5 of the total amount of investment; within this, if the total amount of investment is less than US!g12.5 million, the registered capital shall not be less than US!g5 million.

(4) If the total amount of investment of a Chinese-foreign equity joint venture is more than US!g30 million, the registered capital shall be at least 1/3 of the total amount of investment; within this, if the total amount of investment is less than US!g36 million, the registered capital shall be not less than US!g12 million.

[Article 4] If a Chinese-foreign equity joint venture encounters special circumstances, so that it is not able to implement the above provisions, an approval shall be obtained from the Ministry of Foreign Economic Relations and Trade and the State Administration of Industry and Commerce.

[Article 5] If a Chinese-foreign equity joint venture increases its investment the proportion of the added registered capital to the increased investment shall be carried out in accordance with these Regulations.

[Article 6] The proportion of registered capital to the total amount of investment in Chinese-foreign cooperative joint ventures or wholly foreign-owned enterprises shall be carried out with reference to these Regulations.

[Article 7] These Regulations shall be applicable to the proportion of registered capital to the total amount of investment of an enterprise established with investment of companies, enterprises, other economic organizations or individuals from Hong Kong, Macao or Taiwan.

[Article 8] These Regulations shall come into force on the day of promulgation.