The China Briefing Bookstore
Updated edition contains new laws and regulatory issues affecting China JVs
China Briefing has just published a new, updated edition of the successful “Setting Up Joint Ventures in China.” Priced at US$25 (RMB200) plus p&p, the handbook is available from sales@china-briefing.com or from our bookstore via credit card payment here.
Details of contents are as follows:
Chapter One
Devising your China investment strategy
Options concerning foreign investment vehicles
JVs versus WFOEs – Working out what’s best for you
JV regulatory issues and implementation rules
Encouraged industry applications
Chapter Two
Structuring your JV
General issues
Technology transfer agreements
Legal and financial due diligence
Land use rights
The memorandum of understanding
Contractual JVs
Equity JVs
JV contracts and articles of association (includes drafts)
The application procedure
Intellectual property
Chapter Three
Location issues and investment incentives
Development zones and tax breaks
New 25 percent income tax rates
Chapter Four
Human resources
Inheriting staff
Employing Chinese staff
Employing expatriate staff
Good recruitment practices
General HR conditions and salaries
The new labor law
Chapter Five
Tax and finance
Registered capital calculations
Business taxes
Income taxes
Individual income tax
Export tax rebates
Audit requirements
Profits repatriation
Chapter Six
JV conversions and closures
Buying out your partner
Converting JVs to WFOEs
Liquidating a JV
Glossary of terms
Related reading
China Briefing’s Guide to China Mergers & Acquisitions – New 2008 first edition
April 16th, 2008 at 12:28 pm
JV’s are often mis-understood. They represent the most challenging aspect of investment into China as they are invariably used for the largest investments, either through a legal requirement for a Chinese partner, or a politically desirable need to have one. We’ve pointed out here before the assets a Chinese partner can bring to the table, and in particular existing supply chains and distribution channels.
The largest JV we have been involved with was the establishment of Santa Fe (now Devon Energy) Oil Resources of Texas and their JV with CNOOC in Shekou, Shenzhen. That ate up over USD200 million to produce results, however is now over 10 years old and still going strong - and successfully. It was fun and games sometimes to get both parties aligned, particularly in finance and administration issues, taking a few years to evolve a mutually beneficial reporting system, however, we got there. A huge find in the South China Sea in year four also helped matters - there were periods both partners were irritable with each other and seemingly working hard for no reward. But such is life in big ticket industries, and oil & gas in particular. But that JV got through it all, and now is massively profitable. I can point to many other similar examples we have handled over the years.
The issues affecting most JV’s is the management of them, which can be challenging and complicated. However, there are ways to deal with the Chinese partner, even from a minority position, that puts you in effective control. Both this book, and the forthcoming issue of China Briefing Magazine (see Home button at top) deal with “Managing Your Chinese Joint Venture Partner” - the magazine out in ten days, the book available now.
Advising on a subsequently successful JV is the crowning achievement of any businessman or lawyers China career, and when constructed and operated well is a thing of beauty. JV’s remain a hugely important vehicle for big ticket FDI into China and they can be both very successful and well managed. At China Briefing, and Dezan Shira & Associates, our job is to tell you how.