Provisions on foreign investors recoup their investment in advance at the duration of the joint venture and cooperative enterprises

Updated: Mar 21, 2018 Print

The joint venture belongs to "equity" corporate enterprise, therefore, foreign investors are prohibited to recoup their investments in advance. But for cooperative enterprises, according to the law on Chinese-foreign cooperative ventures and the provisions on implementing regulations of the Sino-foreign joint ventures, foreign partners can conditionally recoup investment in advance during the term of cooperation. These conditions are: 1) when cooperation term of cooperative enterprise contract expires, all fixed assets of cooperative enterprise are owned by Chinese partner without exception; 2) for recycling investment prior to taxation, they must ledge applications to financial tax organ and get inspected and approved according to law; 3) Sino- foreign partners shall bear responsibility of debt of cooperative enterprise according to related laws and contract of cooperative enterprise; 4) foreign partner proposes applications of recycling investment in advance, upon specifying total amount, deadline and modes of advance investments recovery, and reporting to the examination and approval authority after getting inspected by the financial and tax authorities; (5) foreign partners of joint venture shall recoup investments in advance after the loss is made up.

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