If you want your business to catapult to success, you need to set it in the right place, and China provides all that an entrepreneur would want. From a supportive administration to super-infrastructure, China has taken decades to position itself as a business paradise, a reason why almost every big multinational in different niches, from the logistics to pharmaceutical industry, has some presence there.
To take advantage of China as an offshore investment destination, one of the best business formations is a joint venture (JV). Keep reading to learn more about joint ventures in China and the simple, yet professional way to register them.
Why You should Consider Setting Up a Joint Venture in China
Different from wholly foreign-owned enterprises and representative offices that allow you to have 100% shareholding, joint ventures (JVs) require you to enter into a partnership with a Chinese resident.
Although the Chinese partner is required by the law to be the majority shareholder in the company, the arrangements come with a lot of benefits that you should not miss. Notably, the Chinese administration is also changing this law to make the business investment environment more attractive.
- Getting your company started is easy.
- You can take advantage of the Chinese partner’s already established business networks.
- Growing your business can be fast when using a joint venture.
- It is easy to enjoy local treatment when bidding for public tenders.
- You can access the lucrative niches which are otherwise discouraged for foreign investors.
It is paramount to note that for you to enjoy these benefits of joint ventures in China, it is paramount to ensure you identify the right partner. This should be a partner who is ready to go to any length to ensure your venture becomes successful.
Steps for Registering a Joint Venture in China
The process of setting up a joint venture in China can be lengthy, and it is prudent to ensure that all the steps are followed. Once you have selected the preferred partner, here are the main steps to follow:
- Prepare a letter of intent detailing the agreement between the two partners to form a joint venture.
- Your Chinese partner is required to prepare a project proposal detailing the venture’s structure, with both sides being investors.
- A feasibility study is prepared by both partners, showing that the project under consideration is viable.
- Select a name for your joint venture and have it approved by the local Administration of Industry and Commerce (AIC) in the region (municipality) where you intend to locate the business.
- Prepare the contract and articles of association that lays down the organization’s principles, such as rules of management and methods of operations.
- Prepare the leasing contract. This is a leased office space contract for business operations with a particular focus on the need for future expansion.
- Get the certificate of approval of the joint venture. Once you have all the documents accepted by the Administration of Industry and Commerce (AIC), formal approval for the JV will be issued by the Municipal Commission of Commerce (MOC).
- The certificate of approval will form the basis for you to apply for a business license, which is required before you can start running the joint venture.
The Simple and Faster Way to Register a Joint Venture
Looking at the above steps are needed to register a joint venture in China, you will realize that the process is lengthy and complicated because it entails dealing with multiple offices. However, you can incorporate a joint venture faster and smoothly by working with an expert agency.
Since business registration firms have been in the industry for years, they have the expertise in crafting all the needed documents fast and professionally. They can also hold your hands during the early period of your investment to help put the venture on a growth trajectory.
If you want to expand your business offshore, China is a great option because of its good business environment. To make the process of registering your joint venture easy, fast, and cost-effective, you should consider working with expert agencies. Reach us today to learn more about how our experts can help you with setting up a joint venture in China.