Valuing Your China Partners Shares and Conversion from JV to WFOE

June 2004 China Briefing

In this issue we examine assessing the value of Chinese partners shares, and the mechanisms for converting JV's into WFOE's as part of an acquisition process, and have an in-depth look at IP security in China from Dr. Richard Snodey of the American Arbitration Association in New York. The main article, “Valuing Joint Venture Partners Shares, and Conversion of a China Joint Venture to a Wholly Foreign Owned Enterprise” is by Sabrina Zhang, Regional Partner, Dezan Shira & Associates Beijing, and details the valuation of shares, Chinas new regulations concerning asset valuations, valuation methodology, and a detailed examination of the buy-out procedure. Dr. Snodeys article “Intellectual Property Security in Chinas Rapidly Expanding Commerce” explores the current state of affairs in China IP protection, examines protective strategies, and looks towards a more secure future and the regulatory regimes that need to be put in place to obtain this. Regional Updates are also provided, with Lori Zhang, from Dezan Shira & Associates Shenzhen office contributing “CEPA updates affecting Hong Kong companies in Chinas Service Sector”, Lulu Zhang, Regional Partner, Dezan Shira & Associates Shanghai writing “Updates On Shanghai Social Security Benefits Affecting Foreign Investors Monthly Overheads”, Sabrina Zhang, Regional Partner Dezan Shira & Associates Beijing describing “New Regulations Concerning Implementing Rules in Chinas Auto-Financing Financial Sector”, and Chris Devonshire-Ellis, Senior Partner, with “Incentives For Foreign Investors in Remote Chinese Regions”.