Enterprises

Chinese regulations on investment period of foreign-invested enterprise

If one-time investment is written in the joint-venture contract, the investing parties shall submit their subscribed shares in 6 months from the date of business license issued; if installment is set for in the contract, the first subscription rate of all parties shall not be less than 15% of their subscribed shares each, and shall pay in 3 months from the date of business license.

If the investing parties fail to pay in the specified period, the foreign-invested enterprise shall be deemed dismiss automatically, and the ratification certificate shall become invalid accordingly. Those that don’t go through canceling formalities and submit business license, the industrial and administrative organ will confiscate their licenses and make it publicized.

Any investing party of the foreign-invested enterprise fail to pay or submit their subscribed shares in accordance with contract, it will mean breach of agreement. The abiding party shall urge the breach party to pay or submit during one month, if not pay or submit on time, the breach party shall be deemed to give up all rights and withdraw the foreign-invested enterprise. The abiding party shall within one month apply for the original authority to dismiss the would-be foreign-invested enterprise or seek for other foreign cooperative investor to bear the right and obligations of the breach party. The abiding party may demand the breach party to compensate for the economic damages caused by no payment or subscription on time.