nt venturer's investment may include the right to the use of a siteprovided for the equity joint venture during the period of its operation.If the right to the use of the site is not taken as a part of the Chinesejoint venturer's investment, the equity joint venture shall pay theChinese Government for its use. The above-mentioned investments shall bespecified in the contract and articles of association of the equity jointventure, and their value (excluding that of the site) shall be assessed byall parties to the venture.
Article 6An equity joint venture shall have a board of directors; the number of thedirectors thereof from each party and the composition of the board shallbe stipulated in the contract and articles of association afterconsultation among the parties to the venture; such directors shall beappointed and replaced by the relevant parties. The chairman and the vice-chairman (vice-chairmen) shall be determined through consultation by theparties to the venture or elected by the board of directors. If theChinese side or the foreign side assumes the office of the chairman, theother side shall assume the office(s) of the vice-chairman (vice-chairmen). The board of directors shall decide on important issuesconcerning the joint venture on the principle of equality and mutualbenefit.The functions and powers of the board of directors are, as stipulated inthe articles of association of the equity joint venture, to discuss anddecide all major issues concerning the venture, namely, the venture'sdevelopment plans, proposals for production and business operations, thebudget for revenues and expenditures, the distribution of profits, theplans concerning manpower and wages, the termination of business, and theappointment or employment of the general manager, the vice-generalmanager(s), the chief engineer, the treasurer and the auditors, as well asthe determination of their functions, powers and terms of employment, etc.The offices of general manager and vice-general manager(s) (or factorymanager and deputy manager(s) shall be assumed by the respective partiesto the venture. The employment and discharge of the workers and staffmembers of an equity joint venture shall be stipulated in accordance withthe law in the agreement and contract concluded by the parties to theventure.
Article 7The new profit of an equity joint venture shall be distributed among theparties to the venture in proportion to their respective contributions tothe registered capital, after payment out of its gross profit of theequity joint venture income tax, pursuant to the provisions of the taxlaws of the People's Republic of China, and after deduction from the grossprofit of a reserve fund, a bonus and welfare fund for workers and staffmembers and a venture expansion fund, as stipulated in the venture'sarticles of association. An equity joint venture may, in accordance withprovisions of the relevant laws and administrative rules and regulationsof the state on taxation, enjoy preferential treatment for reduction of orexemption from taxes.A foreign joint venturer that reinvests its share of the net profit withinthe territory of China may apply for partial refund of the income taxalready paid.Article 8An equity joint venture shall, on the strength of its business license,open a foreign exchange account with a bank or any other financialinstitution which is permitted by the state agency for foreign exchangecontrol to handle foreign exchange transactions. An equity joint venturesshall handle its foreign exchange transactions in accordance with theregulations on foreign exchange control of the People's Republic of China.An equity joint venture may, in its business operations, directly raisefunds from foreign banks.The various kinds of insurance coverage of an equity joint venture shallbe furnished by Chinese insurance companies.Article 9The production and business operating plans of an equity joint ventureshall be submitted to the competent authorities for record and shall beimplemented through economic contracts.In its purchase of required raw and semi-processed materials, fuels,auxiliary equipment, etc., an equity joint venture should give firstpriority to purchases in China. It may also make such purchases directlyon the world market with foreign exchange raised by itself.An equity joint venture shall be encouraged to market its products outsideChina. It may sell its export products on foreign markets directly orthrough associated agencies or China's foreign trade agencies. Itsproducts may also be sold on the Chinese market. When necessary, anequity joint venture may set up branches and subbranches outside China.
Article 10The net profit which a foreign joint venturer receives as its share afterperforming its obligations under the laws, and the agreements or thecontract, the funds it receives upon the expiration of the venture's termof operation or its early termination, and its other funds may be remittedabroad in accordance with foreign exchange control regulations and in thecurrency or currencies specified in the contract concerning the equityjoint venture.A foreign joint venturer shall be encouraged to deposit in the Bank ofChina the foreign exchange which it is entitled to remit abroad.Article 11The wages, salaries or other legitimate income earned by a foreign workeror staff member of an equity joint venture, after payment of theindividual income tax under the tax laws of the People's Republic ofChina, may be remitted abroad in accordance with foreign exchange controlregulations.Article 12Based on different lines of trade and different circumstances,arrangements for the duration of equity joint ventures may be madedifferently through agreement by the parties to the venture. Equity jointventures engaged in certain lines of trade shall specify their duration inthe contracts, while equity joint ventures engaged in certain other linesof trade may choose to or not to specify their duration in the contracts.Where an equity joint venture has had its duration specified and theparties to the venture agree to extend the duration, the venture shallfile an application for the purpose with the examination and approvalauthorities six months before its expiration. The examination andapproval authorities shall, within one month after receipt of theapplication, decide on its approval or disapproval.
Article 13In case of heavy losses, failure of a party to perform its obligationsunder the contract and the articles of association, or force majeure etc.,the parties to the joint venture may terminate the contract through theirconsultation and agreement, subject to approval by the examination andapproval authorities and to registration with the state's competentdepartment in charge of industry and commerce administration. In cases oflosses caused by a breach of contract, the financial responsibility shallbe borne by the party that has breached the contract.Article 14Disputes arising between the parties to an equity joint venture which theboard of directors has failed to settle through consultation may besettled through mediation or arbitration by an arbitration agency of Chinaor through arbitration by another arbitration agency agreed upon by theparties.Article 15This Law shall enter into force as of the date of promulgation. The powerto amend this Law is vested in the National People's Congress.
库 名: 01. 国家法律法规库(49年--94年)(全 部)
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