Xiamen Foreign Investment Enterprise (FIE) Service
Hotline: 86-755-82143348 Email: 2355725105@qq.com
The foreign-invested partnership enterprises (FIPE) is a new structure for foreign investors to consider after March 1st, 2010, with the recent release of the Administrative Measures on the Establishment of Partnership Enterprises in Xiamen by Foreign Enterprises or Individuals (FIP measures) and the Administrative Provisions on the Registration of Foreign-Invested Partnership Enterprises (FIP registration procedures). As foreign investors have pursued establishing joint ventures (JVs) and, later, wholly foreign-owned enterprises (WFOEs), since the inception of Xiamen’s foreign-investment boom more than 30 years ago, now it is the time to consider another option for structuring foreign investment in Xiamen, and it may offer companies greater flexibility!
Xiamen Invested Partnership Enterprises (FIPE) set up – Conditions of FIPE in Xiamen
Firstly, Less than 2 partners cannot success through the foreign invested partnership enterprises registration and form the enterprise. No certain requirements on the nationality of partners, thus it can be all foreign investors to form a FIPE or Foreign with Chinese partners. Secondly, this partnership relationship requires a written agreement between the partners, that this document must be submitted to the State Administration of Industrial & Commerce along with the certified passport copy of the partners. Thirdly, capital contribution declaration must be subscribed or noted as actually paid by the partners. Last but not least, it needs a business name and an office in an office building for the partnership enterprise.
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Xiamen Invested Partnership Enterprises (FIPE) set up – the Reason of Setting up FIPE in Xiamen
The basic contours of a partnership in Xiamen are similar to partnership structures in other countries, though Xiamen may pass legislation to clarify certain details in the coming years. Broadly speaking, a partnership provides more structural flexibility than equity joint ventures (EJV), cooperative joint ventures (CJV), and other investment vehicles.
Xiamen Invested Partnership Enterprises (FIPE) set up – Capitalization of FIPE in Xiamen
Partnerships, including FIPs, are not subject to statutory minimum capitalization requirements. The Partnership Enterprise Law provides for a more liberal scope of recognized capital contributions compared to the more restrictive rules for EJVs, CJVs, and WFOEs. In addition to cash and in-kind contributions, labor services may also be contributed to a partnership, provided that the contributor is not a limited partner. In practice, services are often contributed by one or more partners, particularly in a limited partnership where the general partner manages cash contributions of the limited partners. Partnerships are also exempt from the 70 percent cap on the contribution of non-cash assets applicable to foreign-invested enterprises (FIEs) and other domestic companies under the PRC Company Law—a key consideration for high-tech start-ups, where intangibles often represent the bulk of a venture’s assets.
Xiamen Invested Partnership Enterprises (FIPE) set up – Advantages of FIPE in Xiamen
The advantages of establishing a FIPE, compared with other types of enterprises, include, but not limited to:
1. No requirements on minimum registered capital;
2. Less procedures comparing with Wholly Foreign Owned Enterprise or Joint Venture
3. Capability of converting RMB profits to US dollars for remittance to its parent company outside of Xiamen;
4. Foreign Enterprise or Individual is allowed to establish a Partnership Enterprise with Chinese individual (While Chinese individual is not allowed to have Joint Venture Company with foreign investor)
5. The profit distribution of a FIPE could follow an informal negotiated agreement or abide by scheme adopted in the partnership agreement.
For certain types of investment cooperation, particularly investment funds, investors may be drawn to FIPE, given its flexibility in the areas of capitalization, profit distribution, and governance—as well as its potential tax advantages. ATAHK is a diversified international company, offering these services formation professionally.
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