Is It Invalid to Establish Joint Ventures between Foreign Companies and Chinese Citizens in China?

(By You Yunting) Today we would like to introduce a typical case concerning the situation where a Chinese citizen tries to form a joint venture with a foreign individual. Pursuant to Chinese laws and regulations, foreign companies, enterprises, other commercial organizations and individuals (the “foreign investors”) can only form joint ventures with Chinese companies, enterprises and other commercial organizations, rather than with Chinese citizens. For these reasons, the court determined that the contract agreed upon by the Chinese citizens and foreign investors was invalid and each party should undertake the expenses and costs of establishment individually.

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Newly Revised Investment Catalogue: JV can Operate Online Music in China without VIE now

The Guiding Catalogue of Foreign Investment in China (the Catalogue) revised in the last year has come into effect on 30th January, 2012. The new Catalogue contains some modified regulation on foreign investment in China, and today Bridge IP Law Commentary would like to introduce you the change in respect of internet business in the Catalogue. (the image above is the logo of myspace.cn, invested by Mr. Rupert Murdoch through VIE, which is claimed temporary shut down for technology reasons)

I. Permission of foreign investment in online music industry

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