AsiaBS
Company Formation
China Company
Joint Venture
Company Formation
such as BVI, Samoa etc.
Company Parking
Service in Hong Kong
Service in China
As the investment regulation and business environment changes in China, less and less foreign investor use joint venture as the investment vehicle. RO and WFOE are now most commonly used.
JV is fading out because of the practical difficulties in :
- picking the proper China partner
- management
- technology transfer
- profit sharing, etc.
There are 2 types of Joint Venture (JV) :
Equity Joint Ventures
Equity Joint Venture is the older type, which provides less flexibility. An Equity Joint Venture always takes the form of a limited liability company.
This shields the personal property and wealth of the responsible individuals from corporate loss.
The allocation of profits is the most significant difference between Equity Joint Ventures and Cooperative Joint Ventures.
In Equity Joint Ventures, the ratio of capital contributions made by the partners determines how profits are allocated.
If one party contributes 40% of the total capital investment, they will receive 40% of total profits.
This shields the personal property and wealth of the responsible individuals from corporate loss.
The allocation of profits is the most significant difference between Equity Joint Ventures and Cooperative Joint Ventures.
In Equity Joint Ventures, the ratio of capital contributions made by the partners determines how profits are allocated.
If one party contributes 40% of the total capital investment, they will receive 40% of total profits.
