A. Regulations Concerning the Ratio Between Registered Capital and Total Investment
1. When total investment is USD 3 million or less, its registered capital should be at least 7/10 of the total investment;
2. When total investment is between USD 3 million and USD 10 million (including USD 10 million), the registered capital should be at least 1/2 of the total investment, and for investment whose total is under USD 4.2 million, the registered capital should not be lower than USD 2.1 million;
3. When total investment is between USD 10 million and USD 30 Million (including USD 30 Million), the registered capital should be at least 2/5 of the total investment, and for investment whose totals is under USD 12.5 million, the registered capital should not be lower than USD 5 million.
4. When total investment is above USD 30 million, its registered capital should be at least 1/3 of the total investment, and for investment whose total is under USD 36 million, the registered capital should not be less than USD 12 million.
In case foreign invested enterprise increases its investment, the ratio between the additional registered capital and the additional investment should also follow the above regulations.
B. Regulations Concerning the timing of capital injections of foreign invested enterprise
1. Where the capital contributions are to be made in a lump sum as provided by the joint venture contract (articles of association from the issuance of the business license), the parties in the joint venture should:
(1) For companies with a registered capital less than USD 500,000 (including USD 500,000), all capital shall be injected into the company within one year;
(2) For companies with a registered capital more than USD 5 million and less than USD 1 million (including USD 1 Million), all capital shall be injected into the company within 18 months;
(3) For companies with a registered capital more than USD 1 million and less than USD 3 million (including USD 3 Million), all capital shall be injected into the company within 2 years;
(4) For companies with a registered capital more than USD 3 million and less than USD 10 million (including USD 10 Million), all capital shall be injected into the company within 3 years;
(5) For companies with a registered capital above USD 10 million, all capital shall be injected into the company within the period of time specified by the approval authority according to actual conditions.
2. Where the capital contributions are to be made in installments provided by the joint venture contract (articles of association), the first contribution by each party to the joint venture and this first contribution should not be less than 15% of share of its equity in the joint venture and this first contribution should be completed within 3 months of the issuance date of the business license. The remaining sum shall be injected into the company according to the requirements specified above.
C. Regulations Concerning Duration of Sino-foreign Joint Ventures
In their joint venture contract, the parties in the Sino-foreign joint ventures can agree upon duration for their venture, or they can choose not to set duration for it.
1. Service industries, like hotels, apartment buildings, office buildings, entertainment, restaurant, taxis, color photo developing and enlarging, decorations and consulting etc;
2. Land development and real estate development operation;
3. Exploitation and development operation;
4. Investment item that is restricted by state regulations
5. Other items for which the state laws and decrees require contract duration
The duration of the joint venture whose duration is required to be set in contracts should be based on the type of its industry, sum of investment, investment risk, and project period of investment recovery. Normally, it should not exceed 30 years. If the investment are made on projects that are encouraged and allowed by the state, or projects that involve large amount of investment, a long construction period, or projects that have advanced technology supplied by the foreign parties, or projects that produce the products with high competitiveness in the international market, the duration can be extended to 50 years under normal circumstance and over 50 years specially approved by the state council.
The duration for joint venture undertaking and self-operating land development projects shall not exceed the tenure of the right to land use acquired/leased; Duration for joint ventures undertaking development of real estate to be sold or transferred upon completion should be set within a reasonable period of development. Construction, sale and transfer; Duration for joint ventures undertaking exploration and exploitation of resources development should be set within a reasonable period for the approved reserve to be completely mined and extracted.
D. Maximum Tenure for the Transfer of Land Use Right
50 years for industrial land;
40 years for land for commercial, tourism and recreational use;
70 years for land for residential use;
50 years for land to be used for educational, scientific, technological, cultural, medical and sports purpose;
50 years for comprehensive and other uses of land.
E. Regulations Concerning RMB Investment in RMB by Foreign Parties of Foreign Invested Enterprises
The RMB profits generated by foreign-invested enterprises in China can be reinvested in order to expand the original, enterprises or be invested in a new foreign invested enterprise. The RMB profits generated from investment by a foreign business shall be certified by local Foreign Exchange Administration authorities.
F. Regulations Concerning Residence Permits by Resident Expatriates Working in Foreign Invested Enterprises
Resident expatriates staying for over one year should apply to the Municipal Public Security Bureau for a long-term residence permit by presenting the “ Employment Certificate for Expatriate ”issued by the Municipal Labor Bureau.
The following documents should be produced when applying for long term residence permit;
1. Photocopies of the foreign invested enterprise’s incorporation approval certificate, and business licenses;
2. Regulations on employment by the Board of Directors of the foreign invested enterprises;;
3. Valid passport
4. Health Certificate
5. Tow recent 2 photos, full faced, half length