Wholly foreign-owned enterprises
Foreign or overseas companies, enterprises, economic organizations or individuals or any investment sources that establish enterprises with its sole investment in the Jiangning development zone are all considered as wholly foreign-owned enterprises; branches of a foreign enterprise or other economic organizations in China shall not be considered as wholly foreign-owned enterprise. All the profits of such enterprises shall belong to the foreign investors.

Sino-foreign equity joint ventures
Sino-foreign equity joint ventures refer to limited liability companies with Chinese Legal Person status jointly established by foreign (or overseas) companies, enterprises or other economic organizations or individuals and Chinese companies, enterprises or other economic organizations under the principle of equality and mutual benefit with the approval of the Chinese Government. The foreign and Chinese parties shall determine the proportion of investment through consultation (however, the foreign investment shall not be lower than 25% of the total registered capital) and share the risks as well as profits during the joint operation of the enterprise. The parties may invest in cash or in kind. Buildings, premises, equipments or other materials, or industrial property rights, know-how and the land use right, etc. may be considered as their shares of investment in the enterprise and the profit thereof shall be distributed according to their share in the enterprise’s registered capital.

Sino-foreign contractual joint ventures
It is a sort of contractual operation under which the responsibility, rights and obligations of each party shall be stipulated in contracts or agreements. The contract or agreement shall obtain the approval of the Chinese Government and be protected and bound by the Chinese laws. The usual practice is as follows: under the principle of equality and mutual benefit, the Chinese and foreign parties determine the management arrangements, profit distribution methods and investment proportions (the foreign party’s contribution shall not be lower than 25% of the enterprise’s registered capital) in a contract. Usually the Chinese party provides the right of land use, workers or services, or premises, equipments and materials. The major difference between an equity joint venture and a contractual joint venture lies in the profit distribution methods. The latter allows non-cash contributions and may not distribute the profit according to the party’s share in the enterprise. Instead, it distributes the profit according to the investment and profit distribution arrangements stipulated in the contract.