How to set up a Sino-Foreign Joint Venture in China (Shanghai) Free Trade Zone? A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance (Wikipedia).” A Sino-Foreign joint venture (JV) is one invested by both Chinese investors and foreign investors, they shared ownership, shared returns and risks, and shared governance by the percentage of shares. Combined with both Chinese investors’ advantage of well-connected in the local community and market approach, and better comprehension of the local culture, and foreign investors’ advanced technology and machinery, such pattern is a win-win for both parties.

 
Since it was established on September 29, 2013, the China (Shanghai) Pilot Free Trade Zone (FTZ) has carried out institutional reform and innovation in areas of investment, foreign trade, finance and post-filing supervision to form a legal framework for investment and trade within the zone. It has adopted the negative list for investment management, simplified foreign trade supervision procedures, promoted financial system reform to realize RMB capital account convertibility, and advocated post-filing supervision as a way to transform government functions.
 
The State Council decided on December 28, 2014 to introduce the practices of Shanghai FTZ nationwide and established free trade zones also in Guangdong, Tianjin and Fujian. It approved the expansion of Shanghai FTZ by incorporating Lujiazui Financial Area, Jinqiao Export Processing Zone, and Zhangjiang High Tech Park, enlarging the FTZ from 28.78 square kilometers to 120.72 square kilometers to provide more space for reform trials.
 

According to the Company Law of the People's Republic of China (Revised in 2013)，Regulations for the Implementation of the Law on Sino-foreign Equity Joint Ventures (Revised in 2001) and related regulations, the procedure to set up a common JV in different areas in China can be a little bit different. Shanghai is the economic center of China and the biggest port of cargo handling capacity, which makes Shanghai always the first option for Sino-Foreign investors to set up their JVs. And this article just introduces how to set up a Sino-Foreign Joint Venture in China (Shanghai) Free Trade Zone.

Please refer to other articles on this site about other specific forms of JVs:
How to set up a Joint Venture in China?
How to set up a Joint Venture in China (Shanghai) Free Trade Zone?
How to set up a service Joint Venture in China?
How to set up a technology Joint Venture in China?
How to set up a trading Joint Venture in China?
How to set up an import & export Joint Venture in China?
How to set up a food & beverage Joint Venture in China?
How to set up a manufacturing Joint Venture in China?
 
1. The Registered Capital(subscribed)/Total Investment Amount of Shanghai Joint Venture: 
According to our many years of practical experience of registering Shanghai Joint Ventures and the latest policy, we suggest that the registered capital should not less than USD 150,000.00 (or CNY 1 million). But since March, 2014, there is no forcing the first round 20% registered capital investment. The subscribed period can be as long as 20 years. It’s very crucial to set an appropriate registered capital. For details, please contact us for help.
 
Ref:
What is and How to change a Joint Venture's Registered Capital?
What is and How to change a Joint Venture's Total Investment Amount?
 
2. The Registered Address of Shanghai Joint Venture: 
A Company must have a registered address, otherwise it can't be registered. If you need to register a JV in Shanghai, you will have to find an office in Shanghai as a registered address. And this address should be business office building, it cannot be residential housing building. No specific area is required. Since the duration for Shanghai JV registration is generally about 2 months, so you can’t actually start your business in the beginning 2 months, and thus a certain amount of rental will be wasted.
Another alternative way is that we provide a virtual address in economic development zone for registration. This address is only for JV set up; you don’t have to and can’t work there, you can rent an office wherever you like in Shanghai. Such address has two major benefits:
(1) Cost saving: Low charges, even free of charge, and it can save rental in the first 2 months when you can’t start your business for not having Business License;
(2) Long-term effective: No bother of changing registered address whenever you want to change your office.
 
Ref:
What is and How to change a Joint Venture's Registered Address?
 
3. Required Documents for Shanghai Joint Venture set up:
According to the Company Law of the People's Republic of China, Regulations for the Implementation of the Law on Sino-foreign Equity Joint Ventures (Revised in 2001) and our many years of practical experience, the documents required for Shanghai Joint Venture Registration are:
(1). 2 Copies of Notarized & Certified Certificate of Incorporation of Overseas investing company;
Certificate of Incorporation needs to be notarized by the local lawyer/notary public, and certified in local Chinese embassy (consulate).
*If the investor is an individual, please provide the original copy of the investor’s passport or provide 2 copies Notarized & Certified passport of the investor.
 
(2). Business License of Chinese investors.
*If the Chinese Investors are individuals, please provide the ID cards.
 
(3). 3 copies of The Passport/ID card of Board of Directors of the JV to be set up;
*Some districts will check the original copy;
*A Sino-Foreign Joint Venture must form a Board of Directors which should be consist of at least 3 persons;
 
(4). 3 copies of The Passport/ID card of JV (often member of Board of Directors) of the JV to be set up;
*Some districts will check the original copy;
 
(5). 3 copies of The Passport/ID card of Supervisor of the JV to be set up;
*Some districts will check the original copy;
*If form a Board of Supervisors, it should be consist of at least 3 persons, or appoint 1 or 2 Supervisors；
 
(6). 10 alternative company (JV) names in Chinese;
 
(7). 1 copy of Leasing Contract & Property Ownership Certificate of Registered Address;
 
(8). Accountant’s information of the JV to be set up;
*Accountant should be Chinese with accountant license.
 
(9). A set of documents prepared by WOFEChina.com(signed/stamped);
 
(10). Other documents required.
*Leasing Contract & Property Ownership Certificate of Registered Address should be stamped or signed by the owner. If the JV is registered in our economic zone or Free Trade Zone (FTZ). We can provide item (6).
 
4. Flow path and Duration for Shanghai Joint Venture set up:
It takes at least one and a half months to finish all procedure of Shanghai Joint Venture set up. If you need to apply for import and export registration it will take 1 additional month; To apply for VAT will take 2 weeks. The above two projects can be done simultaneously. The specific Flow path and Duration for Shanghai Joint Venture set up are:
(1). Check name to see if the company name is available, 3 workdays;
(2). Record Certificate of Foreign Invested Company, 5 workdays;
(3). Business License, 7 workdays;
(4). Engrave Official Stamp/Financial Stamp/Legal Representative’s Stamp, 1 workday;
* Joint Venture set up ends here, the following steps are included in Tax & Accounting services. 
 
(5). Open company bank account, 10 workdays;
(6). Apply for import and export registration, 15 workdays;
(7). Ratify tax category, 15 workdays.
Note: In practice, the delay caused by the investor for not providing proper documents does not count in the Duration for Shanghai Joint Venture set up.
 
5. Service Charge and Administration fees for Shanghai Joint Venture set up:
Please send an email to leo@wofechina.com to get a quotation
 
WOFEChina.com has successfully helped investors from more than 50 countries (regions) all over the world registered Wholly Owned Foreign Enterprises (WOFE), Joint Ventures (JV), Shanghai Representative Offices (RO), and provide one-stop business solution, including Trademark Registration, Bookkeeping, etc. We have a very skilled consultant team, a set of efficient operation system. We provide high-end customized services and accurate information, we will help you take a leap further.
 
Ref:
What should Joint Venture do after Registration?
What should Joint Venture do monthly/annually?

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Contact: Leo Zhang

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