Chinese-foreign joint ventures are also known as equity joint ventures. It is a joint venture established by a foreign company, other economic organization or individual with a Chinese company or other economic organization in China. Its characteristics are that the parties to the joint venture jointly contribute and jointly operate, taking risks and sharing profits and losses according to their respective capital contribution ratios.
Although the demand for foreign investors to establish foreign-invested companies through joint ventures is getting lower and lower, they must be established in joint ventures in some special industries.
Documents required
-Commercial registration documents of the parties to the joint venture
-Bank credit certificate of foreign party
-Real estate certificate or office lease contract
-Resume and identification of legal representative
-Identification of individual shareholders and directors
-Feasibility analysis report
-Joint venture contract, company charter
Advantages of establishing a Sino-foreign joint venture
Sharing resources, complementing each other's advantages, making full use of the Chinese enterprise's network and established well-known brands, and successfully entering the Chinese market
The joint venture can enable foreign investors to take advantage of the geographical advantages of Chinese companies, rationally and legally reduce various financial expenses, and greatly reduce operating costs.
Tax incentives for foreign investor
Tax incentives
Value-added tax
The export of goods produced by a foreign-funded joint venture of a general taxpayer may enjoy the ¡°exemption, offset, refund¡± tax policy:
¡°Exemption¡± means that the export of products is exempt from production and sales VAT.
¡°Offset¡± means that the input tax on raw materials, parts, fuel and power consumed for the production of export products can be offset against the VAT of domestic goods.
¡°Refund¡± means refunding the portion that has not been deducted.
General merchandise sales can be 100% domestic
A foreign-funded joint-venture production enterprise that is a small-scale taxpayer. Export products are exempt from VAT, but no tax refund.
If the domestically produced equipment purchased within the total investment amount is within the scope of the tax-free catalogue, the full value-added tax due to the purchase of domestic equipment may be refunded in full.
Other tax benefits
China grants a 15% tax rate on corporate income tax for industries and projects that focus on supporting and encouraging development.
Equity income tax on dividends, bonuses, etc., which are directly invested by resident enterprises in other resident enterprises, exempt from corporate income tax
National debt interest income exempt from corporate income tax
Exemption or reduction of corporate income tax on income from projects engaged in agriculture, forestry, animal husbandry and fishery
The income from the transfer of technology from the enterprise, part of the less than 5 million yuan is exempted from corporate income tax, and the part of 5 million yuan or more is levied on corporate income tax.
The high-tech enterprises established in Shenzhen, Zhuhai, Shantou, Xiamen, Hainan and Shanghai Pudong New Area after January 1, 2008 are exempt from the first year to the second year from the tax year in which the first production and operation income is obtained. Corporate income tax, from the third year to the fifth year, the corporate income tax is halved at a statutory rate of 25%.
