The basics
A joint venture is a company established in China by Chinese and foreign shareholders. New joint ventures are formed under the Company Law as limited liability companies or joint stock companies, or under the Partnership Enterprise Law.
The Foreign Investment Law replaced the former equity joint venture and cooperative joint venture laws on 1 January 2020, and the five-year transition period ended on 1 January 2025. Equity joint venture (EJV) and cooperative joint venture (CJV) are therefore no longer the statutory classification for newly established foreign-invested enterprises, although the terms can still appear in historical contracts and documents.
A joint venture does not remove sector restrictions. The proposed activities still need to comply with the Negative List and any industry-specific licensing requirements.
Is it right for you?
A joint venture makes sense when a foreign investor and a Chinese partner want to combine resources and expertise in one company, or when the intended activity falls in a sector where the Negative List restricts foreign ownership.
A joint venture is not the only route. Where the intended activity is not restricted, a WFOE, a representative office or a Hong Kong company may be more suitable. Hongda can compare these options as part of the setup discussion.
Scope
Hongda helps structure the joint venture, draft the terms and manage registration. The exact scope is confirmed for each project and may include:
Hongda is an independent business-services provider, not a government agency. Final registration decisions, official documents, licences and bank approvals remain with the competent authorities or financial institutions.
How it works
Quick answer: a typical joint venture setup runs in five stages, from structure planning to ongoing compliance. Select a stage for detail.
Stage 1 of 5
Define the partners, ownership and operating plan.
Stage 2 of 5
Set out partner rights and contributions.
Stage 3 of 5
Prepare and file the registration.
Stage 4 of 5
Foreign investment information and company setup.
Stage 5 of 5
Keep the company in good order.
Hongda confirms the stages after reviewing your case and does not guarantee decisions made by authorities or banks.
Legal framework
The current rules combine the Foreign Investment Law, the Company Law and the Negative List. Sector-specific licensing can apply on top.
The Foreign Investment Law replaced the former equity joint venture and cooperative joint venture laws on 1 January 2020. The five-year transition period ended on 1 January 2025.
New joint ventures are governed by the Company Law, as limited liability companies or joint stock companies, or by the Partnership Enterprise Law.
The Company Law sets no uniform foreign shareholding ratio for joint ventures. For sectors not on the Negative List, the Negative List imposes no equity-ratio limit; general market-access and industry-licensing requirements still apply.
The national Negative List has 29 items and has applied since 1 November 2024. The free trade zone Negative List (2021 edition) has 27 items.
Under the Company Law as amended with effect from 1 July 2024 (Article 47), shareholders of a limited liability company must pay subscribed capital in full within five years of establishment.
Companies established on or before 30 June 2024 whose original subscription period runs beyond five years counted from 1 July 2027 must adjust it by 30 June 2027, so that final payment falls no later than 30 June 2032. A capital verification report is not generally required.
Registration
China applies pre-establishment national treatment together with a Negative List.
Even where an activity is not on the Negative List, general industry licences, qualifications, approvals or national security review may still apply.
Foreign investment information is reported through the enterprise registration system and the enterprise credit information publicity system, under the Measures for Reporting of Foreign Investment Information.
This reporting replaces the former approval and filing approach.
Why Hongda
Coordinate registration and the practical work that follows with one China-based service team.
Serving foreign companies in China since 2007, with client relationships that go back to 2008.
Company setup, banking, tax, payroll and work permits coordinated by one team.
English-language project management with a China-based team in seven locations.
We confirm the scope before work begins and say which decisions rest with authorities or banks.
Client voices
Travis Perkins
David Finch BA ACMA CMIIA CAMA
Director of Group Business Risk & Assurance, Travis Perkins PLC
With Hongda since 2008
Travis Perkins PLC (a leading builders merchant in the UK) has been using Hongda Business Services since 2008 for accounting and professional services. Throughout this time, we have found the team at Hongda to be very helpful and professional in their dealings with us. We look forward to working with the company in the future.
Sound United
Jack Peng
Vice President, Asia Pacific, Sound United
With Hongda since 2013
Sound United (a leading designer and manufacturer of consumer audio products in the US) has been using Hongda Business Services since 2013. Moving one’s operations to China is not a small task, but Hongda’s expert services helped us set up a company and deal with tax issues so we could get on with growing our business in no time at all, and that’s why we continue to use them today.
Tulip Pacific Ltd.
Erik de Waard
Director, Tulip Pacific Ltd.
With Hongda since 2012
Tulip Pacific Ltd. (Business planning and interim financial management services) has been using Hongda Business Services since 2012. Hongda has helped us set up legal entities in China/HK and takes care of our annual company audits. They are the most efficient business service provider I have worked with to-date, and their professional advice has helped me better advise my own clients and provide greater value to my overall business.
Your team
Meet the three chief consultants at Hongda, including founder Angel Ho and co-founder Bobby Lee.
Chief Consultant, CEO
Founder of Hongda in 2007. Holds Chinese Tax Agent, IPA (Australia) and IFA (UK) certificates. Provides one-stop services covering market access, company establishment, financial settlement, financial and tax consultation, and human resources management.
Chief Consultant
Co-founder of Hongda. Many years of corporate legal consultancy and involvement in managing client enterprises. Familiar with tax, personnel and project management work across Guangdong, Hong Kong and Macau. Excellent English communication skills.
Chief Consultant
24 years in enterprise management, business development, and financial and tax compliance. Has provided financial and tax advisory services for hundreds of companies. In-depth learning and practical experience in IFRS (International Financial Reporting Standards), Generally Accepted Auditing Standards and International Taxation.
FAQ
Practical answers for foreign investors planning a joint venture in Mainland China.
Ask your questionEquity joint venture (EJV) and cooperative joint venture (CJV) are no longer the statutory classification for newly established foreign-invested enterprises. New joint ventures are formed under the Company Law or the Partnership Enterprise Law.
The Company Law sets no uniform foreign shareholding ratio. For sectors not on the Negative List, the Negative List imposes no equity-ratio limit; general market-access and industry-licensing requirements still apply.
Shareholders of a limited liability company must generally pay subscribed capital in full within five years of establishment. For companies established on or before 30 June 2024 whose remaining period runs beyond five years counted from 1 July 2027, the transition rule sets final payment no later than 30 June 2032.
Not generally. A capital verification report is required only where the law provides otherwise for a sector.
Yes. The national Negative List has 29 items and has applied since 1 November 2024. The free trade zone Negative List (2021 edition) has 27 items. Industry licensing can apply on top.
Foreign investment information is reported through the enterprise registration system and the enterprise credit information publicity system, under the Measures for Reporting of Foreign Investment Information.
Contact our team
Share your plans, structure and timing. We confirm the scope with you before any work starts.
