Reference Contract Form
for Joint Ventures Using
Chinese and Foreign Investment
Chapter I General Provisions
In accordance with "Law of the People\'s Republic of China On Joint Ventures using Chinese and Foreign Investment" and other relevant Chinese laws and regulations, the ____ Company of China and the ____ Company of____ (state) adhering to the principle of equality and mutual benefit and through friendly consultations, agree to jointly invest to set up a joint venture in ____ of People\'s Republic of China. The contract hereunder is worked out.
Chapter II Parties to the Joint Venture
Article 1 Parties to this contract are as follows:
The ____ Company of China (hereinafter referred to as Party A), registered with ____ in China, and its legal address is at ____ (street) ____(district) ____(City) ____China.
Legal representative: Name:
Position:
Nationality:
The ____ Company of (state) (hereinafter referred to as Party B), registered with ____. Its legal address is at ____.
Legal representative: Name:
Position:
Nationality:
(Note: In case there are more than two investors, they will be called Party C, Party D... in proper order.)
Chapter III Establishment of the Joint Venture Company
Article 2 In accordance with the "Law of the People\'s Republic of China on Joint Ventures Using Chinese and Foreign Investment" and other relevant Chinese laws and regulations, both parties to the joint venture agree to set up ____ joint venture limited liability company (hereinafter referred to as the joint venture company).
Article 3 The name of the joint venture company is ____ Limited Liability Company. The legal address of the joint venture company is at ____ street ____(city) ____province.
Article 4 All activities of the joint venture shall be governed by the laws, decrees and relevant rules and regulations of the People\'s Republic of China.
Article 5 The organization form of the joint venture is a limited liability company, each party to joint venture company is liable to the debts of the joint venture within the limit of the capital subscribed by it. The profits, risks and losses of the joint venture shall be shared by the parties in proportion to their contributions of the registered capital.
Chapter IV The Purpose, Scope and Sale of Production and Business
Article 6 The purpose of the parties to the joint venture is in conformity with the wish of strengthening the economic cooperation and technical exchanges, to improve the product quality, develop new products, and gain competitive position in word market in quality and price by adopting advanced and appropriated technology and scientific management method, so as to raise economic results and ensure satisfactory economic benefits for each investor.
(Note: This article shall be written according to the specific situations in the contract)
Article 7 The productive and business scope of the joint venture company is to produce ____ products; provide maintenance service after the stale of the products; study and developw new products.
(Note: It shall be written in the contract according to the specific conditions.)
Article 8 The production scale of the joint venture company is as follows:
1. The production capacity after the joint venture put into operation is ____.
2. The production scale may be increased up to ____ with the development of the production and operation. The product varieties may be developed into ____.
(Note: it shall be written according to the specific situation.)
Chapter V Total Amount of Investment and the Registered Capital
Article 9 The total amount of investment of the joint venture company is RMB ____ (or a foreign currency agreed upon by both parties).
Article 10 Investment contributed by the parties in RMB(or a foreign curreney agreed upon by both parties)____, which will be registered capital of the joint venture company.
Of which: Party A shall pay ____ Yuan. Accounts for ____%; Party B shall pay____ Yuan, accounts for ____%.
Article 11 Both Party A and Party B will contribute the following as their investment:
Party A: cash ____ Yuan.
Machines and equipment ____Yuan.
Premises ____Yuan.
The right to the use of the site ____Yuan
Industrial property or know-how ____Yuan
Others ____ Yuan. ____ Yuan in all.
Party B: cash ____ Yuan.
Machines and equipment ____Yuan.
Premises ____Yuan.
The right to the use of the site ____Yuan
Industrial property or know-how ____Yuan
Others ____ Yuan. ____Yuan in all.
(Note: When contributing capital goods or industrial property as invewtment, Party A and Party B shall conclude a separate contract as a component part of this main contract.)
Article 12 The registered capital of the joint venture company shall be paid in ___install-ments by Party A and Party B according to their respective properties of their investment. Each installment shall be as follows: (Note: it shall be written according to the concrete conditions).
Article 13 In case any party to the joint venture intends to assign all or part of his invest-ment subscribed to a third party. Consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authority is to required.
When one party to the joint venture assigns all or part of the invesment, the other party has preemptive right.
Chapter VI Responsibilities of Each Party to the Joint Venture
Article 14 Party A and Party B shall be respectively responsible for fulfilling the follow-ing matters:
Responsibilities of Party A:
(1) Handing of applications for approval, registration. Business license and other matters for the establishment of the joint venture company from the relevant competent departments in China;
(2) Applying for the right to the use of a site to the authority in charge of the land;
(3) Organizing the design and construction of the premises and other engineering facilities of the joint venture ;
(4) Providing cash, machinery and equipment and premises... in accordance with the stipulations Article 11;
(5) Assisting Party B for processing import customs declaration for the machinery and equipments contributed by Party B as investment and arranging the transportation within the Chinese territory;
(6) Assisting the joint venture company in purchasing or leasing equipments, materials, raw materials, articles for office use, means of transportation and communication facilities etc;
(7) Assisting the joint venture company in contracting and setting the infrastructure facilities such as water, electricity, transportation, etc.;
(8) Assisting the joint venture in recruiting Chinese management personnel, technical personnel, workers and other personnel needed;
(9) Assisting foreign workers and staff in applying for the entry visa, work license and processing their traveling matters;
(10) Responsible for handing other matters entrusted by the joint venture company.
Responsibilities of Party B;
(1) Providing cash, machinery and equipment, industrial property... in accordance with the stipulations in Article 11, and responsible for shipping capital goods such as machineries and equipment, etc. contributed as investment to Chinese port;
(2) Handing the matters entrusted by the joint venture company, such as selecting and purchasing machinery and equipments outside China. Etc;
(3) Providing needed technical personnel for installing, testing and trial production of the equipment, as well as the technical personnel for production and inspecting;
(4) Training the technical personnel and workers of the joint venture company;
(5) In case the Party B is the licensor, he shall be responsible for the stable production of qualified products of the joint venture company in the light of design capacity within the stipulated period;
(6) Responsible for other matters entrusted by the joint venture company. (Note: It shall be written according to the specific situation.)
Chapter VII Transfer of Technology
Article 15 Party A and Party B agree that a technology transfer agreement shall be signed between the joint venture company and party B (or a third party) so as to obtain advanced production technology needed for realizing the production and operation purpose and the production scale stipulated in Chapter 4 in the contract, including products designing, technology of manufacturing, means of testing, materials prescription, standard of quality and the training of personnel etc.
(Note: It shall be written in the contract according to the concrete conditions.)
Article 16 Party B offers the following guarantees of the transfer of technology: (Note: This article applies only to the joint venture\'s contract when Party B is responsible for transferring technology to the joint venture company.)
(1) Party B guarantees that the overall technology such as the designing, technology of manufacturing, technological process, tests and inspection of products (Note: The name of the products shall be written) provided to the joint venture company must be integrated, precise and reliable. It is to meet the requirement of the joint venture\'s seperation purpose, and to guarantee the achievement of production quality and production capacity stipulated in the contract;
(2) Party B guarantees that the technology stipulated in this contract and the technology transfer agreement shall be fully transferred to the joint venture company, and pledges that the provided technology should be truly advanced amount the same type of technology of Party B, the model, specification and quality of the equipment are excellent and it is to meet the requirement of technological operation and practical usage;
(3) Party B shall work out detailed list of the provided technology and technological service at various stages as stipulated in the technology transfer agreement to be a appendix to the contract, and guarantee its performance;
(4) The drawings, technological requirements and other detailed date are component part of the transferred technology, which shall be guaranteed to be offered on time.
(5) Within the validity period of the technology transfer agreement, Party B shall provide the joint venture company within the improvement of the technology and the improved information and technological materials in time, and shall not charge separate fees;
(6) Party B shall guarantee that the technological personnel and the workers in the joint venture company can master all the technology transferred within the period stipulated in the technology transfer agreement.
Article 17 In case Party B fails to provide equipment and technology in accordance with the stipulations in this contract and in the technology transfer agreement or in case any deceiving or concealing actions are found, Party B shall be responsible for compensating the direct losses to the joint venture company.
Article 18 The technology transfer fee shall be paid in royalties. The royalty rate shall be ____% of the net sales value of the products turned out. The term for royalty payment is the same as the term for technology transfer agreement stipulated in Article 19 of this contract.
Article 19 The term for the technology transfer agreement signed by joint venture company and Party B is ____years. After the expiration of the technology transfer agreement, the joint venture company shall have the right to use, research and develop the imported technology continuously.
(Note: The term for a technology transfer agreement is generally no longer that 10 years, and it shall be approved by the Ministry of Foreign Economic Relations and Trade or other examination and approval authorities entrusted by the Ministry for Foreign Economic Relations and Trade.)
Chapter VIII Selling for Products
Article 20 The products of joint venture company will be sold both on Chinese market and on overseas market, the export part accounts for ____%, and ____%for domestic market.
(Note: An annual percentage and amount for outside and inside selling will be written out according to practical situations, in normal conditions, the amount for export shall at least meet the needs of foreign exchange expenses of the joint venture company.)
Article 21 Products may be sold on overseas market through the following channel:
The joint venture company may directly sell its products on the international market, which accounts for ____%
The joint venture company may sign sales contract with Chinese foreign trade companies, entrusting them to be the sales agencies or exclusive sales agencies, which accounts for ____%. The joint venture company may entrust Party B to sell its products, which accounts for ____%.
Reference Contract Form
for Joint Ventures Using
Chinese and Foreign Investment
Chapter I General Provisions
In accordance with "Law of the People\'s Republic of China On Joint Ventures using Chinese and Foreign Investment" and other relevant Chinese laws and regulations, the ____ Company of China and the ____ Company of____ (state) adhering to the principle of equality and mutual benefit and through friendly consultations, agree to jointly invest to set up a joint venture in ____ of People\'s Republic of China. The contract hereunder is worked out.
Chapter II Parties to the Joint Venture
Article 1 Parties to this contract are as follows:
The ____ Company of China (hereinafter referred to as Party A), registered with ____ in China, and its legal address is at ____ (street) ____(district) ____(City) ____China.
Legal representative: Name:
Position:
Nationality:
The ____ Company of (state) (hereinafter referred to as Party B), registered with ____. Its legal address is at ____.
Legal representative: Name:
Position:
Nationality:
(Note: In case there are more than two investors, they will be called Party C, Party D... in proper order.)
Chapter III Establishment of the Joint Venture Company
Article 2 In accordance with the "Law of the People\'s Republic of China on Joint Ventures Using Chinese and Foreign Investment" and other relevant Chinese laws and regulations, both parties to the joint venture agree to set up ____ joint venture limited liability company (hereinafter referred to as the joint venture company).
Article 3 The name of the joint venture company is ____ Limited Liability Company. The legal address of the joint venture company is at ____ street ____(city) ____province.
Article 4 All activities of the joint venture shall be governed by the laws, decrees and relevant rules and regulations of the People\'s Republic of China.
Article 5 The organization form of the joint venture is a limited liability company, each party to joint venture company is liable to the debts of the joint venture within the limit of the capital subscribed by it. The profits, risks and losses of the joint venture shall be shared by the parties in proportion to their contributions of the registered capital.
Chapter IV The Purpose, Scope and Sale of Production and Business
Article 6 The purpose of the parties to the joint venture is in conformity with the wish of strengthening the economic cooperation and technical exchanges, to improve the product quality, develop new products, and gain competitive position in word market in quality and price by adopting advanced and appropriated technology and scientific management method, so as to raise economic results and ensure satisfactory economic benefits for each investor.
(Note: This article shall be written according to the specific situations in the contract)
Article 7 The productive and business scope of the joint venture company is to produce ____ products; provide maintenance service after the stale of the products; study and developw new products.
(Note: It shall be written in the contract according to the specific conditions.)
Article 8 The production scale of the joint venture company is as follows:
1. The production capacity after the joint venture put into operation is ____.
2. The production scale may be increased up to ____ with the development of the production and operation. The product varieties may be developed into ____.
(Note: it shall be written according to the specific situation.)
Chapter V Total Amount of Investment and the Registered Capital
Article 9 The total amount of investment of the joint venture company is RMB ____ (or a foreign currency agreed upon by both parties).
Article 10 Investment contributed by the parties in RMB(or a foreign curreney agreed upon by both parties)____, which will be registered capital of the joint venture company.
Of which: Party A shall pay ____ Yuan. Accounts for ____%; Party B shall pay____ Yuan, accounts for ____%.
Article 11 Both Party A and Party B will contribute the following as their investment:
Party A: cash ____ Yuan.
Machines and equipment ____Yuan.
Premises ____Yuan.
The right to the use of the site ____Yuan
Industrial property or know-how ____Yuan
Others ____ Yuan. ____ Yuan in all.
Party B: cash ____ Yuan.
Machines and equipment ____Yuan.
Premises ____Yuan.
The right to the use of the site ____Yuan
Industrial property or know-how ____Yuan
Others ____ Yuan. ____Yuan in all.
(Note: When contributing capital goods or industrial property as invewtment, Party A and Party B shall conclude a separate contract as a component part of this main contract.)
Article 12 The registered capital of the joint venture company shall be paid in ___install-ments by Party A and Party B according to their respective properties of their investment. Each installment shall be as follows: (Note: it shall be written according to the concrete conditions).
Article 13 In case any party to the joint venture intends to assign all or part of his invest-ment subscribed to a third party. Consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authority is to required.
When one party to the joint venture assigns all or part of the invesment, the other party has preemptive right.
Chapter VI Responsibilities of Each Party to the Joint Venture
Article 14 Party A and Party B shall be respectively responsible for fulfilling the follow-ing matters:
Responsibilities of Party A:
(1) Handing of applications for approval, registration. Business license and other matters for the establishment of the joint venture company from the relevant competent departments in China;
(2) Applying for the right to the use of a site to the authority in charge of the land;
(3) Organizing the design and construction of the premises and other engineering facilities of the joint venture ;
(4) Providing cash, machinery and equipment and premises... in accordance with the stipulations Article 11;
(5) Assisting Party B for processing import customs declaration for the machinery and equipments contributed by Party B as investment and arranging the transportation within the Chinese territory;
(6) Assisting the joint venture company in purchasing or leasing equipments, materials, raw materials, articles for office use, means of transportation and communication facilities etc;
(7) Assisting the joint venture company in contracting and setting the infrastructure facilities such as water, electricity, transportation, etc.;
(8) Assisting the joint venture in recruiting Chinese management personnel, technical personnel, workers and other personnel needed;
(9) Assisting foreign workers and staff in applying for the entry visa, work license and processing their traveling matters;
(10) Responsible for handing other matters entrusted by the joint venture company.
Responsibilities of Party B;
(1) Providing cash, machinery and equipment, industrial property... in accordance with the stipulations in Article 11, and responsible for shipping capital goods such as machineries and equipment, etc. contributed as investment to Chinese port;
(2) Handing the matters entrusted by the joint venture company, such as selecting and purchasing machinery and equipments outside China. Etc;
(3) Providing needed technical personnel for installing, testing and trial production of the equipment, as well as the technical personnel for production and inspecting;
(4) Training the technical personnel and workers of the joint venture company;
(5) In case the Party B is the licensor, he shall be responsible for the stable production of qualified products of the joint venture company in the light of design capacity within the stipulated period;
(6) Responsible for other matters entrusted by the joint venture company. (Note: It shall be written according to the specific situation.)
Chapter VII Transfer of Technology
Article 15 Party A and Party B agree that a technology transfer agreement shall be signed between the joint venture company and party B (or a third party) so as to obtain advanced production technology needed for realizing the production and operation purpose and the production scale stipulated in Chapter 4 in the contract, including products designing, technology of manufacturing, means of testing, materials prescription, standard of quality and the training of personnel etc.
(Note: It shall be written in the contract according to the concrete conditions.)
Article 16 Party B offers the following guarantees of the transfer of technology: (Note: This article applies only to the joint venture\'s contract when Party B is responsible for transferring technology to the joint venture company.)
(1) Party B guarantees that the overall technology such as the designing, technology of manufacturing, technological process, tests and inspection of products (Note: The name of the products shall be written) provided to the joint venture company must be integrated, precise and reliable. It is to meet the requirement of the joint venture\'s seperation purpose, and to guarantee the achievement of production quality and production capacity stipulated in the contract;
(2) Party B guarantees that the technology stipulated in this contract and the technology transfer agreement shall be fully transferred to the joint venture company, and pledges that the provided technology should be truly advanced amount the same type of technology of Party B, the model, specification and quality of the equipment are excellent and it is to meet the requirement of technological operation and practical usage;
(3) Party B shall work out detailed list of the provided technology and technological service at various stages as stipulated in the technology transfer agreement to be a appendix to the contract, and guarantee its performance;
(4) The drawings, technological requirements and other detailed date are component part of the transferred technology, which shall be guaranteed to be offered on time.
(5) Within the validity period of the technology transfer agreement, Party B shall provide the joint venture company within the improvement of the technology and the improved information and technological materials in time, and shall not charge separate fees;
(6) Party B shall guarantee that the technological personnel and the workers in the joint venture company can master all the technology transferred within the period stipulated in the technology transfer agreement.
Article 17 In case Party B fails to provide equipment and technology in accordance with the stipulations in this contract and in the technology transfer agreement or in case any deceiving or concealing actions are found, Party B shall be responsible for compensating the direct losses to the joint venture company.
Article 18 The technology transfer fee shall be paid in royalties. The royalty rate shall be ____% of the net sales value of the products turned out. The term for royalty payment is the same as the term for technology transfer agreement stipulated in Article 19 of this contract.
Article 19 The term for the technology transfer agreement signed by joint venture company and Party B is ____years. After the expiration of the technology transfer agreement, the joint venture company shall have the right to use, research and develop the imported technology continuously.
(Note: The term for a technology transfer agreement is generally no longer that 10 years, and it shall be approved by the Ministry of Foreign Economic Relations and Trade or other examination and approval authorities entrusted by the Ministry for Foreign Economic Relations and Trade.)
Chapter VIII Selling for Products
Article 20 The products of joint venture company will be sold both on Chinese market and on overseas market, the export part accounts for ____%, and ____%for domestic market.
(Note: An annual percentage and amount for outside and inside selling will be written out according to practical situations, in normal conditions, the amount for export shall at least meet the needs of foreign exchange expenses of the joint venture company.)
Article 21 Products may be sold on overseas market through the following channel:
The joint venture company may directly sell its products on the international market, which accounts for ____%
The joint venture company may sign sales contract with Chinese foreign trade companies, entrusting them to be the sales agencies or exclusive sales agencies, which accounts for ____%. The joint venture company may entrust Party B to sell its products, which accounts for ____%.
