Joint Ventures
BIZCHINA / Company laws
Law of the People's Republic of China on Chinese-Foreign Contractual
Joint Ventures
Updated: 2006-04-18 09:49
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.
Article 22. 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.
Article 23. Upon the expiration or termination in advance of the term of
a contractual joint venture, its assets, claims and debts shall be
liquidated according to legal procedures. The Chinese and foreign parties
shall, in accordance with the agreement specified in the contractual
joint venture contract, determine the ownership of the venture's property.
A contractual joint venture shall, upon the expiration or termination in
advance of its term, cancel its registration with the administrative
authorities for industry and commerce and the tax authorities.
Article 24. The period of operation of a contractual joint venture shall
be determined through consultation by the Chinese and foreign parties and
shall be clearly specified in the contractual joint venture contract. If
the Chinese and foreign parties agree to extend the period of operation,
they shall apply to the examination and approval authority 180 days prior
to the expiration of the venture's term. The examination and approval
authority shall decide whether or not to grant approval within 30 days of
receiving the application.
Article 25. Any dispute between the Chinese and foreign parties arising
from the execution of the contract or the articles of association for a
contractual joint venture shall be settled through consultation or
mediation. In case of a dispute which the Chinese or the foreign party is
unwilling to settle through consultation or mediation, or of a dispute
which they have failed to settle through consultation or mediation, the
Chinese and foreign parties may submit it to a Chinese arbitration agency
or any other arbitration agency for arbitration in accordance with the
arbitration clause in the contractual joint venture contract or a written
agreement on arbitration concluded afterwards.
The Chinese or foreign party may bring a suit in a Chinese court, if no
arbitration clause is provided in the contractual joint venture contract
and if no written agreement is concluded afterwards.
Article 26. The detailed rules for the implementation of this Law shall
be formulated by the department in charge of foreign economic relations
and trade under the State Council and reported to the State Council for
approval before implementation.
Article 27. This Law shall come into force as of the date of its
promulgation.
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