Joint Venture

1 THE CONCEPT OF JOINT VENTURE
The Sino-foreign joint venture is the enterprise that foreign companies, enterprise and other economic organizations or individuals (hereinafter referred to as "foreign joint ventures") to establish equity joint venture together with Chinese companies, enterprise and other economic organizations (hereinafter referred to as "Chinese joint ventures") within the territory of the People's Republic of China, on the principle of equality and subject to approval by the Chinese Government. Both parties to the venture shall share the profits, risks and losses in proportion to their contributions to the registered capital.

2 REFERENTIAL POLICIES in CHINA
1) The company will enjoy tax holidays for the first two years since the company makes profit and enjoy half tax for the following three years;
2) The enterprise income tax of manufacturing foreign-funded enterprises shall be levied at the rate of 15% .While the other area in china is usually 33%, in some coastal area the rate is 22%.
3) China's tax law provides that a wholly foreign funded manufacturing enterprise is allowed two years exemption of corporate income tax starting form the year generating profits, and a half corporate income tax in the following six years. After the tax allowance policies expire, certified export enterprises whose export volume accounts for 70% or above of the current production are allowed a reduced rate of 10% of corporate income tax.
4) For some advanced –technology enterprises which engaged in the software development are allowed two years exemption of corporate income tax starting form the year generating profits, and a half corporate income tax in the following three years.
Certified advanced –technology enterprises are allowed two years exemption of corporate income tax starting form the year generating profits , and a half corporate income tax in the following eight years.

For the certified highly-supported advanced –technology enterprise are allowed five years exemption of corporate income tax starting form the year generating profits, and a half corporate income tax in the following five years.

3 REGISTERED AND PAID-UP CAPITAL
1) For the trading enterprises, the registered capitals are usually required as much as 500,000RMB or above; (the lowest capital is 30,000RMB)
2) For the manufacturing enterprise, the registered capitals are usually required 1 million RMB or above;
3) For the company of consultancy, technology, market research and development, the registered capitals are usually required RMB100,000 or above;
All of the registered capital can be paid in one time; (within 6 months after the date of issuance of the Company's business license) and can also be paid for many times in two years. In the first 3 months, 15% of the registered capital is mandatory. The terms of payment is determined by the volume of registered capital. The capital verification fees will be reduced if the terms of payment reduce.

4 OPERATING PROCEDURE:
1) ENTRUSTING PROCEDURE
Step1: Fill in the application form (sign the agreement)
Step2: Entitle the company name
Step3: pay for the earnest money (50% of total)
Step4: submit the needed document
Step5: check the document
Step6: submit all the document to the government
Step7: inform the course to the customer
Step8: finished in the 20-50 working days
Step9: inform the customer to take the document
Step10: pay the spare money
Step11: sign the receipt.

2) GORVERNMENT PROCESSING PROCEDURE
Step1: Check the name form Industrial and commercial Bureau (pre-reserve commercial number/ name checking)
Step2: Approval of fire and environment authorities
Step3: pre-approval
Step4: Go to Bureau of Trade and Industry for the foreign investment approval certification
Step5: Apply for the business license from Industrial and commercial bureau
Step6: Apply for chops from Public and Security Bureau
Step7: Apply for the Organization Code License from Bureau of Quality and Technical Supervision
Step8: Apply for the registration license from State Administration of Taxation &Local Administration of Taxation
Step9: Apply for the foreign exchange registration license/opening capital account license from State Administration of Foreign Exchange
Step10: Opening the capital account in the bank
Step11: Opening the basic account in the bank
Step12 Apply for the IM&EX registration license from Customs (if needed)

3) CUSTOMER PROCESSING PROCEDURE
Step1: Foreign investors director meeting resolution
Step2: Entitle the company name
Step3: Business scope confirmation
Step4: Registered capital confirmation
Step5: Shareholder confirmation
Step6: Appoint legal representative of Chinese company
Step7: Chinese office confirmation (consider fire and environment factors if needed)
Step8: Transact lawyer's notarization and submit it to the authority dept to sign
Step9: Reference letter of bank
Step10: Entrust to transact
Step11: Inject the investment money to the capital account on behalf of investor
Step12: Capital verification
Step13: After-approval

5 DOCUMENTS REQUIRED
①For the trading enterprise, the following documents are required:
1) Board of director's meeting minutes or resolution of two parties;
2) One proposed name (in Chinese), and provide two back-up names in case the first name is not available;
3) Detailed information about the business scope and registered capital;
4) Feasible study report;
5) Original Articles of Association;
6) Duplicate copy of the business license and certificate of incorporation of two parties;
7)The original and copies of identity certification of pre-established company's legal representative, and color photo;
8) Two original bank reference letters (from foreign investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese language;
9) Lawyer's notarization
10)Chinese investor's annual audit report and seals;
11) The office address: your own house property or the rented commercial building (two original copies of lease signed and sealed by the local Housing Management Authority , showing the recognized registered address of joint venture. The signing party should be in the name of one shareholder or the foreign company; the purpose must be for commercial use)

② For the manufacturing enterprise, the following documents are required:
1-9 The same as above
10) Production address: your own house property or the rented commercial workshop (two original copies of lease with signature by Housing Management Authority, showing the recognized registered address of joint venture. The signing party should be in the name of one shareholder or the foreign company; the purpose must be for workshop use)
11) Approval of environmental and fire departments.

③ For the abroad natural person, the following documents are required:
1) Board of director's meeting minutes or resolution of two parties;
2) Duplicate copy of identity certification of foreign investors& Legal representative, directors of pre-established company;
3) Lawyer's notarization of foreign investor's identity certification;
4) Duplicate copy of ID & two color photos of the pre-established company's legal representative;
5) Feasible study report;
6) Original copy of Articles of Association;
7) Two original bank reference letters (from foreign investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese language;
8) Chinese investor's business license, annual audit report and company's seals.

6 OUR SERVICES
YONGDA provides one-stop tailored-made services for foreign companies which would like to set up wholly foreign funded enterprises in China.
1) Approval document;
2) Original Articles of Association;
3) Foreign investment enterprise approval license;
4) Both original and duplicate copy of business license;
5) Cachet, financial, custom and legal representative private chop;
6) Seal carving registration card;
7) License of Opening account;
8) Opening and canceling account confirmation;
9) Both original and duplicate copy of Organization Code License & card;
10)Registration license and form of State &Local Administration of Taxation;
11) Foreign exchange registration license and approval certificate;
12) Customs declaration registration certification;
13)Finance registration license and form.

7 THE TIME NEEDED
1) For manufacturing enterprise: 20-50 working days will be finished. (Count the time after the approval of environment & fire and the detailed time depends on the operation type)
2) For the trading enterprise: 20-40 working days will be finished.
(The detailed time depends on the operation type)