You intend to have food joint venture of big scale, right?
Yes, a joint venture pays less income tax, or even no income tax at all under certain conditions during the first five profit making years.
Yes. The parties to the joint venture shall share the profits, risks and losses in proportion to their respective contributions.
Yes. The parties to the joint venture may contribute cash, capital goods and industrial property rights, etc, as their investment.
Yes. First of all, you have to do a market survey to choose the right project and seek a suitable Chinese partner.
What is the price of the total amount of investment?
About $ 6 million. This figure is large enough to provide the construction funds and circulation capital.
We'll supply machinery and equipment estimated at about 40% of the total investment.
We lay out about 51% of the total investment.
They shall be assessed according to their prices on the world market.
I think that the total amount of investment would at least be 5 million US dollars. Only this figure can provide the construction funds and circulating capital.
Could you tell me how long the joint venture will be?
We can fix the term for 10 years first. If we can run the venture well, the period can be prolonged later.
I suggest 10 years to start with. The contract would be extended if both sides agree.
This joint venture needs a large investment, and the capital recovery period is long, so we suggest that the term of the contract is 40 years.
May I ask how should profit and loss be shared between the parties to a joint venture?
A joint venture set up between parties to it is and independent entity assuming sole responsibility for its profit and loss. The profit and loss shall be shared between the parties to the jiont venture in proportion to their respective contributions.
As for the profit distribution of the joint venture, we would like to suggest that the net profits of the joint venture for the first three years of operation should not be distributed, but should be used to replenish the capital of the joint venture.