Chinese-foreign joint venture, Chinese-foreign cooperative joint venture and foreign-funded enterprise are the main forms that foreign businessmen make investment in China. There are other investment forms including the establishment of a foreign-invested joint stock company limited, investment company, BOT, TOT and the transfer of property rights, etc.

1. Chinese-foreign joint venture

        Chinese-foreign joint ventures refers to an enterprise that, Chinese and foreign venturer make joint investment, have joint operation and share the profits, risks and loss proportionally within China, in accordance with the provisions of China’s laws.

2. Chinese foreign cooperative joint venture

        It is a contractual enterprise that is established within China by foreign enterprise, other economic organization or individual together with Chinese enterprise or other economic organization. The cooperation conditions, distribution of profits, risks and losses, investment reclaims, operation and management manners and the adscription of the remained properties upon terminating the cooperation etc. for the cooperative parties are stipulated in contracts.

3. Foreign-funded enterprise

        It refers to the enterprise that are established by a foreign enterprise, other economic organization or individuals within China, with all the capital invested by the foreign investor. It is also called exclusively foreign-owned enterprise. All the profits acquired by the enterprises are owned by the foreign investors.

4. Foreign-invested joint stock company limited

        It is the business entity that is composed by shares of equal value and shareholders shall be liable to the company to the extent of the shares held by them, the company limited by shares is liable for the debts of the company with all its assets, of which the shares purchased and held by foreign shareholders cover over 25% of the company’s register capital. Company like this could be established by ways of promotion or stock floatation.

5. Investment company

        An investment company is a limited liability company that is established by a foreign investor with exclusive capital or has joint venture with a Chinese investor within China for engaging in direct investment. The foreign investor who applies for establishing an investment company must have sound credit, own considerable economic force, have established a certain number of foreign-funded enterprises within China and the actual paid-in registered capital contribution has surpassed 30 million US dollars. An investment company that has been approved for establishment by Chinese government is endowed with wider business scope than that of general foreign-funded enterprises so as to encourage transnational companies to carry out serial investment activities. At present, investment companies are encouraged and permitted to make investment in the fields of the industry, agriculture, infrastructures and energy etc.

6. BOT form

        BOT is short for BUILD-OPERATE-TRANSFER. BOT form means that the investor undertakes an established industry program or infrastructures program in the invested country and is responsible for the building, operation, maintenance and transfer of the said program. Within the fixed period the investor is allowed to operate the facilities and withdraw the cost for investment, operation, maintenance and other expenditures. After the expiration of prescribed time limit, transfer this program to the government of the program party.

7. TOT form

        TOT is short for TRANSFER─OPERATE─TRANSFER. TOT pattern refers that the program unit namely the Chinese party, according to the arrangements in contracts, transfers the facilities of the program that has been put into production and operation to a foreign businessman to run. The operator pays one-off to the Chinese party according to the estimated cash flow of the program in the coming years. Meanwhile, the operator will charge rational usage fee, service fee and other fees form the user during the operation period. After the expiration of the operation period, the foreign merchant will transfer the facilities to the Chinese party.

8. Transfer of property rights

        It refers to the making or accepting for the transfer of property right of state-owned enterprises with consideration under the stipulations of laws. Any foreign corporation, natural person or other organizations may be transferee acquiring property right of state-owned enterprise in China; meanwhile, the said enterprise shall become a foreign-funded enterprise and enjoy preferential policy set by the state.