1、Establishment of foreign enterprises
● Definition:
Foreign enterprises established within Chinese territory upon approval in accordance with the law on foreign-enterprises in China, are legal person who shall be governed and protected by Chinese law. There are three types, Chinese-foreign equip joint venture, Chinese-foreign contractual joint venture, wholly foreign-owned enterprises.

1. Chinese-foreign equip joint venture: In accordance with the Law of the People’s Republic of China and other relevant Chinese laws and regulations, foreign companies, enterprises, organizations or natural foreigners and Chinese companies, enterprises or other economic organizations, adhering to the principles of equality and mutual benefit and through friendly consultations, agree to jointly establish an equity joint venture company in China.

The Chinese-foreign equip joint venture shall be a limited liability company, foreign party’s contribution to the registered capital can not less than 25% of the total investment. Each party’s liability to the company shall be limited to the amount of capital contribution subscribed by it. The parties shall share the profits and bear the risks and losses in proportion to their respective contribution to the registered capital.

2. Chinese-foreign contractual joint venture: The investment or conditions for cooperation contributed by the Chinese and foreign parties may be provided in cash or in kind, or may include the right to the use of land, industrial property rights, non-patent technology or other property rights. If a Chinese or foreign party wishes to make an assignment of all or part of its rights and obligations prescribed in the contractual joint venture contract, it must obtain the consent of the other party or parties and report to the examination and approval authority for approval. The Chinese and foreign parties shall share earnings or products, undertake risks and losses in accordance with the agreements prescribed in the contractual joint venture contract.
If, upon the expiration of the period of a venture's operation, all the fixed assets of the contractual joint venture, as agreed upon by the Chinese and foreign parties in the contractual joint venture contract, are to belong to the Chinese party, the Chinese and foreign parties may prescribe in the contractual joint venture contract the ways for the foreign party to recover its investment ahead of time during the period of the venture's operation. If the foreign party, as agreed upon in the
contractual joint venture contract, is to recover its investment prior to the payment of income tax, it must apply to the financial and tax authorities, which shall examine and approve the application in accordance with state provisions concerning taxes.
If, according to the provisions of the preceding paragraph, the foreign party is to recover its investment ahead of time during the period of the venture's operation, the Chinese and foreign parties shall, as stipulated by the relevant laws and agreed in the contractual joint venture contract,
be liable for the debts of the venture. After the foreign party has fulfilled its obligations under the law and the contractual joint venture contract, the profits it receives as its share, its other legitimate income and the funds it receives as its share upon the termination of the venture, may be remitted abroad according to law. The wages, salaries or other legitimate income earned by the foreign staff and workers of contractual joint ventures, after the payment of the individual income tax according to law, may be remitted abroad.

3. Wholly Foreign-owned Enterprise: In order to expand foreign economic co-operation and technological exchange and to promote the development of the Chinese national economy, the People's Republic of China shall permit foreign enterprises and other economic organizations or individuals to establish wholly foreign-owned enterprises within Chinese territory, and shall protect the lawful rights and interests of such enterprises.
It is a legal entity and difference to branches established in China by foreign enterprises or other economic organizations. It shall be a limited liability company, limited to the amount if capital contribution subscribed by it.

1. Branches

1. Branches of foreign enterprises

2. Permanent representative office

1. Scope of Business:

Industries in which the establishment of foreign enterprises is encouraged, permitted, restricted or prohibited by the state shall be determined in accordance with the provisions of the State in the Regulations on Foreign investment Guidelines and the Catalogue for the Guidance of Foreign Investment Industries.

Hereafter is the business scope for reference:

1. Consulting service

International economic, business, High-technology and environmental protection information consultancy.

1. Import & Export rights

Self-import & export or being a forwarder agent

1. Technology service

Computer technology engineering, network technology and developing, communication engineering, electronic technology, biology and pharmaceutical trituration. Chemical new material developing, optical, mechanical and electronic integration，aerospace，ocean industry and High-Tech in energetic, environmental protection and domestic nuclear energy.

1. Trading

Retail and wholesale: Grocery, knitted garment fabrication, garment, cap, furniture, tools, stationary, industrial and building construction material, sanitary ware, hardware, electronic products, communication applicants, stage equipments and so on.

☆ Edible
Cereal and oil products, deep-frozen foods, milk products, native products, candy, cake, drinks, edible perfumery, flavoring, healthy food, can, rice and noodle products, vegetable oil, tea-leaf, aquatic products, agricultural products, food additive and so on.

1. Manufacturing

Lamps and lanterns manufacturing, edible food process, jewelry designing and process, air- condition, cosmetic, paint, stationary, artwork, mobile accesaries manufacturing and so on.

五、Registered capital

Wholly foreign-owned enterprises shall abey the << company law in PRC>>, whose registered capital is at least 30,000 RMB, meanwhile, it shall meet the rate account for total investment.

●Total investment is not excess USD3,000,000 ( including USD3,000,000), the registered capital is at least account for 70% of the total investment. Further more, if total investment is not excess USD4,200,000, the registered capital is at least USD2,100,000.

●Total investment is morn than USD10,000,000( including USD10,000,000), the registered capital at least account for 50% of the total investment.