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Joint Venture |
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September 20, 19.. |
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Re: Joint Venture |
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Dear Mesdames or Sirs, You are probably aware that we are one of the largest manufacturers and exporters of chemical fertilizers in Japan, having over 35 years' experience in this line of business. We have factories producing chemical fertilizers in practically all the industrial cities in our country. For the past few years we have had considerable business dealings with China National Chemicals Import & Export Corporation, and our relations with them are satisfactory. We are pleased to learn of the announcement made by your government in August 1979 that China is encouraging equity joint ventures with foreign firms. We take this opportunity to approach you in the hope that you will introduce us to any Chinese partners interested in forming joint ventures with us in producing chemical fertilizers in China. We are aware that joint venture involves complicated legal procedures as well as arrangements relating to percentage of contributions, distribution of dividends and management, etc. of which we should like to have full particulars from you at your earliest convenience so that we may go further into the matter and come to an agreement in the near future. It is our desire to expand our business activities with China, and we hope our interest in joint venture will help promote China's modernization in socialist construction. We await your favourable rely. Yours
sincerely |
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September 30, 19.. |
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Dear Mesdames or Sirs, We are in receipt of your letter of September 20 expressing your interest in joint venture in manufacturing chemical fertilizers and requesting us to introduce to you Chinese partners who may be interested. We have immediately contacted the responsible cadres of the Ministry of Chemicals, who state that they welcome your participation but first of all would like to know the approximate amount of your investment and in what from your contribution will be, i.e. in cash, capital goods or technology. They would also like to know if you agree to the project site being in a city other than Shanghai. Our Joint Venture Law places no upper limit on the share of the registered capital of a joint venture contributed by a foreigner although, generally speaking, the minimum amount acceptable will not be less than 25%. The profits, risks and losses of a joint venture shall be shared by the parties to the venture in proportion to their contribution to the registered capital. It is advisable to state that according to China's Joint Venture Law, once a joint venture has been concluded, the contracting parties will have to apply to the Foreign Investment Commission for authorization of the agreement or contract signed between the parties to the venture and of the articles of association of the venture formulated by them. The Commission shall authorize or reject these documents within three months. When authorized, the joint venture shall register with the General Administration for Industry and Commerce of our government and start operation under licence. We should appreciate your early reply to the questions enumerated above, on receipt of which we shall take the matter up with potential Chinese partners. Yours sincerely |