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    Company investments & joint ventures – China

    Charltons provides high impact advice on the negotiation, establishment and on-going operation of equity and contractual joint ventures in China, wholly foreign-owned enterprises, and trading companies in China.

    We have almost two decades of experience in China and have offices in Shanghai and Beijing, as well as long established relationships with top Chinese law firms in all of the major Chinese cities. Our deep local knowledge and international perspective gives us a unique insight into Chinese business practices and issues arising from foreign investments and joint ventures in China.

    We provide smart and practical advice on key issues to be considered when structuring investments, strategic alliances and joint ventures in China, including offshore structuring, exit strategies and profit repatriation, and strategies to safeguard know-how and intellectual property. We help foreign investors avoid some of the common mistakes when entering into joint ventures in China, assisting in carrying out proper due diligence on potential joint venture partners, and developing mechanisms for controlling and monitoring the activities of the joint ventures in China.

    We provide an insightful and highly personalised service to clients, guiding them through the complex PRC regulatory requirements, foreign investment restrictions and governmental approvals involved in establishing joint ventures and foreign invested entities in China, including filings with the Ministry of Commerce (MOFCOM) and the State Administration for Industry and Commerce (AIC). We can advise on the foreign investment restrictions in a particular industry or sector, and have particular experience in obtaining approvals from regulatory authorities in highly regulated industries. We also assist in merger control and competition related matters in China, including notifications to the Anti-Monopoly Bureau of MOFCOM under China’s Anti-Monopoly Law.

     

     

    Joint venture business scope and commercial objectives

    A joint venture agreement (JVA) will usually set out the scope of the joint venture’s business and its commercial objectives (which may include details of any proposed projects or milestones).

    The definition and scope of the joint venture company’s business will be particularly important if the joint venture agreement is to contain restrictive covenants preventing the shareholders from competing with the joint venture’s business. The shareholders may want to spend time clearly delineating the scope of the joint venture’s proposed business (including its geographic location) to ensure that the shareholders’ other business activities do not fall foul of any restrictions included in the joint venture agreement.

    If the parties to the joint venture aim to realise their investment by means of a trade sale or listing of the joint venture company within a certain period of time, the joint venture agreement could also include a provision that the parties will use their reasonable endeavours to achieve this end.

    In the case of a listing in Hong Kong, this could also include provisions requiring shareholders to provide all information necessary to facilitate the listing (including verification of such information) and to provide information requested by the Stock Exchange of Hong Kong Limited (the SEHK), the Hong Kong Securities and Futures Commission or other governmental bodies responsible for reviewing a listing application. Shareholders may also pre-emptively agree to a lock-up of their shares for a specified period post-listing to comply with the Listing Rules or the recommendation of the listing underwriters. However, it is uncommon for a Hong Kong incorporated company to be listed on the SEHK, as offshore companies (e.g. Cayman Islands or Bermudian companies) have traditionally been preferred as listing vehicles. This means that at some stage the joint venture parties may need to effect a restructuring to establish an offshore company as the ultimate holding company of the group to be listed.

    Restrictive covenants

    If the joint venture is intended to establish an ongoing business, the joint venture agreement may contain restrictive covenants which limit the extent to which the shareholders are permitted to compete with the business of the joint venture company and/or to solicit the joint venture company’s customers, employees or suppliers.

    The parties will need to consider matters such as:

    • the exact scope (including geographic location) of the business which is the subject of the non-compete obligations
    • whether the non-compete obligations will bind members of the shareholders’ groups as well as the shareholders themselves
    • whether any carve-outs from the non-compete obligations are required to allow for the shareholders’ (or their groups’) existing business activities (or eg de minimis investments in listed securities), and
    • remedies for breach of the non-compete obligations, which could include the forced sale of a shareholder’s competing business or of its shares in the joint venture company

    The competition law implications of any restrictive covenants included in the joint venture agreement should be considered and care should be taken to ensure that such restrictions are reasonable and likely to be enforceable.

    49特码生肖:Joint Ventures in China

    Foreign investments in China

    Joint venture agreement

    Hong Kong joint venture agreement

    PRC joint venture agreement

    Hong Kong legal advice on joint ventures in China

    Trading companies in China

    Chinese business practices

    Wholly foreign-owned enterprise

    Ministry of Commerce MOFCOM

    PRC regulatory requirements
    State Administration for Industry and Commerce AIC
    Joint venture structure
    China’s Anti-Monopoly Law
    Joint venture partnerships

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  • 苹果高管驳斥iPhone计划报废说 iOS 12就是证据 2019-05-07
  • 热门楼盘趁势而入迎热销 红六月正式上线 ——凤凰网房产天津 2019-04-29
  • 国家税务总局:国地税改革进入具体实施操作阶段 2019-04-28
  • 习近平关于生态环境保护的十个精妙论述 2019-04-28
  • 生态环境部严厉打击转移倾倒固体废物及危险废物 2019-04-27
  • 马克思的每个人全面而自由发展,是人的最高需求层次理论。 2019-04-22
  • 空调还装墙壁上?聪明人都是往这里装,好看又省地 ——凤凰网房产 2019-04-22
  • 这下就真的更加坐实你的老蚕了,所有网友都是见证!想赖都赖不掉了。 2019-04-20
  • 空姐,到底要不要漂亮?-光明时评 2019-04-18
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  • [视频]《乡村振兴战略大家谈》第六集4分钟精编版 2019-04-12
  • 赵哲春季写真大公开 百变风格切换自如 2019-04-07
  • “无中生有”也能助力文旅 2019-04-07
  • 坚守一条红线 维护生态安全(在习近平新时代中国特色社会主义思想指引下——新时代新作为新篇章) 2019-04-07
  • 中国石油呼和浩特石化公司获第十二届人民企业社会责任奖年度环保奖 2019-04-07