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Modes of Investment
Sino-foreign joint venture enterprises, sino-foreign cooperative enterprises, foreign capital enterprises are the main mode of foreign investment in China. Other modes of investment include stock company limited of foreign investment, investment company, sino-foreign cooperation and development, BOT and so on.
1. Sino-Foreign Joint Venture Enterprises
It refers to those enterprises which are jointly invested and conducted by foreign companies, enterprises and other economic organizations or individuals and Chinese companies, enterprises or other economic organizations according to the Act on Sino-Foreign Joint Venture Enterprises in the People’s Republic of China and its statutes.
2. Sino-Foreign Cooperative Enterprises
It refers to those enterprises which are jointly conducted by foreign companies, enterprises and other economic organizations or individuals and the companies, enterprises or other economic organizations in China according to the Act on Sino-Foreign Cooperation Administration Enterprises in the People’s Republic of China and the conditions on cooperation offered by both sides.
3. Foreign Capital Enterprises
It refers to those enterprises which are established in China and invested entirely by foreign companies, enterprises and other economic organizations or individuals according to the Act on Foreign Capital Enterprises in the People’s Republic of China. Branch organizations of foreign enterprises and other economic organizations in China are not included.
4. Foreign Investment Stock Co. Ltd
It refers to the companies which are jointly conducted in China by foreign companies, enterprises and other economic organizations or individuals and Chinese companies, enterprises or other economic organizations by subscribing for a certain proportion of stock according to the principle of equality and mutual benefit.
5. Investment Companies
It refers to the companies which are set up in China by foreign investors in the form of sole proprietorship or joint venture with Chinese investors. Those companies are engaged in direct investment in the form of limited liability companies.
6. Career-Creation Investment Enterprises
Career-creation investment is mainly engaged in share investment in hi-tech enterprises which have not come into the stock market. It will offer the enterprises service on career-creation and administration in order to get the profit from the added value of capital.
7. Sino-Foreign Cooperative Development
Chinese and foreign companies sign the venture contrast, jointly explore and develop oil and mineral resources at sea and overland. Today, it is a widely-employed mode of economic cooperation in the field of natural resources in the world with the characteristics of high risk, high investment and high profit.
8. BOT
It means that the investors undertake an industrial program or infrastructure program in the country they invest in and are responsible for the construction, operation, maintenance and transfer of the program. In a fixed period of time, the investors have access to the equipment and are permitted to retrieve the investment and the charges of operation, maintenance and other charges. When the regulated term expires, this program will be transferred to the local government. In China, the BOT mode is employed in the fields of expressways, electric power factories and sewage disposal etc in the form of establishing project companies.
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