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China briefing: Joint Ventures

As part of our series of articles about doing business in China this briefing note covers the advantages and disadvantages of Joint Ventures.
20th July, 2018

A Sino foreign joint venture is a limited liability company incorporated by a Chinese partner and a foreign company.

Two or more parties jointly invest and own a stake - they share profits, operational expenses, risk and control of the company as well as responsibility for the profit and loss of the company.

Foreign investors in JVs may be foreign companies, enterprises, other economic organisations or individuals. On the Chinese side, it is currently open exclusively to Chinese companies, enterprises and other economic organizations, and not to Chinese individuals.

As a foreign investor, when should you choose to establish a JV in China?

  • When a non-Chinese investor needs to enter a certain industry where a local partner is obligatory due to the restrictions outlined in the People's Republic of China (PRC) Foreign Investment Industrial Guidance Catalogue or

  • When a local partner is able to offer tangible benefits such as well-established distribution channels, government relationships or knowledge of the local market.

To read more about joint ventures please click here.

Managing director China

Cindy Cheng
Cindy Cheng
Managing Director Shanghai