Sino-foreign equity and contractual JVs are required to specify in their contract and articles of association, and foreign enterprises in their articles of association, the time limit for capital contribution. If such a provision is missing, the project will not be approved and cannot be registered.
According to regulations, capital contribution may be made in two ways. First, one-off contribution, i.e. parties to the JV should make their capital contributions within six months after the issuance of business license. Second, contribution by instalment. The first instalment should not be less than 15% of the capital contribution the parties to the JV undertake to make. The balance should be paid up within a specified time limit. Detailed implementation rules are as follows:
In the event that an FIE fails to make its capital contribution in full within the time limit stipulated in the contract due to special circumstances, application for extending the time limit for capital contribution may be made to the original approval authority and the case should be filed with the registration authority for the record.