From Joint Venture Law to the New Company Law: Critical Strategies for Compliance

On January 1, 2020, the Foreign Investment Law was implemented, officially repealing the Law on Sino-Foreign Equity Joint Ventures (the "Joint Venture Law"), which had governed joint ventures for 40 years since its introduction in 1979.

During the five-year transition period of the Foreign Investment Law, the new Company Law was enacted and came into effect on July 1, 2024. As a result, joint ventures that have not yet adjusted to the Foreign Investment Law must transition their governance structures and other relevant aspects directly from the original Joint Venture Law to the new Company Law.

Understanding the concerns joint ventures may have regarding this transition—specifically how to smoothly adapt to the new Company Law model and the opportunities and challenges it presents—in this webinar, Kathy Wang, Assistant Manager of Business Advisory Services, will discuss key regulatory changes impacting joint ventures and outline strategies for necessary adjustments.

Key Points:

1. Regulatory Framework

• Historical development of laws and regulations governing joint ventures
• December 31, 2024 – Deadline for the Foreign Investment Law transition period

2. Key Regulatory Changes Affecting Joint Ventures

• Governance Structure: The root cause of many joint venture pain points
  • Governance structures decoupled from actual power distribution
  • Supervisor board in name only
  • JV deadlock issue
• Capital System: New rules that must be taken seriously
  • Capital contribution challenges
  • Shares forfeiture mechanism
  • JV share transfer under new capital system
• Duties and Obligations of Senior Executives
• Shareholder’s Right to Know

3. How to Make Adjustments to Your Joint Venture

• Assess the current status of your joint venture
• Distinguish between mandatory and optional adjustments

This webinar is FREE of charge. For any questions or concerns, please contact Freda CHEN, at freda.chen@dezshira.com. We look forward to having you join us in this webinar, and answering any questions you might have on the subject.

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