Why the joint venture question is now commercial, not legal
For most of China's reform era the joint venture was not an option, it was the only door. The Equity Joint Venture Law of 1979 made a Chinese partner a legal precondition for foreign manufacturing, and an entire generation of entry strategy was built around finding the right one. That door was removed on 1 January 2020, when the Foreign Investment Law took effect and repealed all three of the old foreign-investment statutes (Law of the PRC on Foreign Investment, NPC).
What replaced it is a system nobody designed for joint ventures: pre-establishment national treatment plus a negative list. Outside a short list of restricted activities, a foreign company is treated exactly as a Chinese one at the point of establishment. The commercial result is visible in the data. In 2025 China registered 70,392 new foreign-invested enterprises, up 19.1%, while actual foreign direct investment fell 9.5% to RMB 747.69 billion — more entrants, each committing less capital. In the first half of 2026 the pattern held: 31,617 new foreign-invested enterprises, up 5.3%, on RMB 402.14 billion of investment, down 5% (MOFCOM, July 2026).
"Should I take a Chinese partner?" has therefore become a question about capability and control, not about permission. The answer is different for a beauty brand testing Tmall Global and for a company building a Chinese manufacturing base, and it is worth answering deliberately rather than by inherited reflex.
A China joint venture is a limited liability company incorporated in China and owned jointly by a foreign investor and Chinese shareholders, governed since 1 January 2020 by the Company Law rather than by the repealed Equity Joint Venture Law
A China joint venture (中外合资企业) is now a shareholding arrangement, not a separate legal species. Article 31 of the Foreign Investment Law states that the organisational form, governance and rules of activity of a foreign-invested enterprise follow the Company Law and the Partnership Enterprise Law — the same statutes that govern a purely domestic company. The old vocabulary survives in conversation, but in registration documents what you are setting up is an ordinary limited liability company with two categories of shareholder.
Two consequences follow. The protections once specific to joint ventures — prescribed profit-sharing, mandatory board seats, statutory licence terms — are no longer defaults; today they exist only if your articles of association and shareholders' agreement create them. And joint ventures incorporated before 2020 were given five years to keep their original organisational form, a window that closed on 31 December 2024.
What a Chinese shareholder is still legally required for
The Special Administrative Measures for Foreign Investment Access — the negative list — is the single document that decides whether a foreign investor may own 100% of a Chinese business or must share it. The 2024 edition, issued as NDRC and MOFCOM Order No. 23 and in force since 1 November 2024, cut the national list from 31 entries to 29 and removed the last two manufacturing restrictions: publication printing, previously reserved for Chinese control, and the production of certain traditional Chinese medicine preparations. Manufacturing is now the first major sector with zero foreign-access restrictions (State Council policy interpretation, September 2024).
The five consecutive revisions between 2017 and 2021 already took the national list from 93 entries to 31 and the separate free-trade-zone list from 122 to 27, with the free-trade zones clearing manufacturing restrictions in 2021 (NDRC interpretation, November 2024). What remains in the 29 entries sits in agriculture and seed breeding, energy and resources, telecommunications, media and publishing, education and healthcare, and only a subset of those entries still requires a Chinese controlling shareholder or caps foreign equity. For a consumer-goods brand, the negative list does not require a partner.
The structures that replaced the old binary choice
Choosing an entry structure means deciding who is legally responsible for importing, registering and selling the product in China, and how much of the brand's margin and control that party takes. Three structures cover the overwhelming majority of consumer-brand entries, and a fourth is only for cases where a partner's licence is genuinely the product.
| Structure | Control and capital | Typical time to first sale | When it fits |
|---|---|---|---|
| Overseas or Hong Kong entity + licensed importer of record | No Chinese entity, no Chinese equity. The importer declares and holds the customs relationship. | 6–10 weeks (GOODSINFINITE case benchmark) | Cross-border and bonded retail tests; a first read on demand before committing capital |
| WFOE (wholly foreign-owned company) | 100% foreign ownership. Capital subscribed and paid in within five years. | 3–6 months including licences (GOODSINFINITE case benchmark) | Domestic e-commerce, general trade, onshore staff, invoicing in renminbi, own import licence |
| Joint venture with a Chinese shareholder | Shared ownership and shared board control. Your partner's capital and capability arrive with their rights. | 3–7 months plus negotiation | Restricted activities, or where a licence, key account or factory cannot be contracted |
| Distribution agreement only | No equity, no registration. The distributor owns the customer relationship. | 4–8 weeks | Fast shelf access in a category where brand control matters less than coverage |
The commercial distinction is between owning a capability and renting it. A licensed importer of record, a Tmall partner and a distributor all supply the Chinese counterparty that customs and platforms require without any equity changing hands — which is why "do I need a Chinese partner" and "do I need a Chinese company" are different questions.
Capital and control rules that tightened in 2024
Registered capital rules are where most structure decisions are quietly decided. The revised Company Law took effect on 1 July 2024 and requires shareholders of a limited liability company to pay in their subscribed capital within five years of establishment, ending the era of arbitrarily long subscription periods. The State Council's implementing regulation, Order No. 784, set the transition: companies registered on or before 30 June 2024 whose remaining contribution period would still exceed five years from 1 July 2027 must adjust it to five years or less by 30 June 2027 (State Council Order No. 784, July 2024).
Most sectors have no statutory minimum registered capital, so the number in the articles is a choice — but it is no longer a free one. A large nominal figure is now a legal obligation with a five-year clock, and a joint venture partner who cannot fund their share of it becomes a liability on your balance sheet. Under the Company Law, voting rights default to the proportion of capital contributed unless the articles provide otherwise, so any protection you want — reserved matters, board composition, transfer restrictions on your partner's stake, a route out — has to be written into the articles and the shareholders' agreement. Governance is a drafting exercise, and it is cheaper than litigation.
Policy incentives now favour structure over partnership
China's incentive framework has also shifted toward rewarding structure rather than partnership. The 2025 Action Plan for Stabilising Foreign Investment, circulated in February 2025, pushes deregulation in telecommunications, healthcare and education and commits to revising the rules on foreign acquisition of domestic enterprises, including lowering the threshold for cross-border share swaps (State Council General Office, 2025). The revised Catalogue of Industries Encouraging Foreign Investment, effective 1 February 2026, expanded to 1,679 entries — a net increase of 205 on the 2022 edition — with 619 national and 1,060 regional entries (NDRC and MOFCOM, December 2025). Those benefits attach to what an entity does on the ground, not to who owns it, which again favours choosing the right structure over adding a partner for appearances.
A decision sequence that holds up
- Confirm the activity is off the negative list. If it is not restricted, a Chinese shareholder is a choice, not a requirement — price it accordingly.
- Decide what you are optimising for. Speed to first sale, control of the brand, or reach into offline distribution rarely point to the same structure.
- Check whether the capability can be contracted. Import declaration, licence holding, platform operation, warehousing and last-mile delivery are all purchasable services.
- If you incorporate, test the capital plan against the five-year rule. Size registered capital to what you can fund, and insist your partner does the same.
- Write governance before you sign equity. Board seats, reserved matters, dividend policy, non-compete and exit mechanics are negotiated once, when you have leverage — then reviewed in year two, when a contracted partner's performance makes the equity conversation cheaper.
How GOODSINFINITE fits
GOODSINFINITE TRADE LIMITED acts as importer of record and in-market operator for overseas brands, which means the structure question is usually settled in the first planning session rather than after a year of deliberation. Where a brand needs to test demand, we provide the licensed Chinese counterparty and bonded-warehouse reach across Tianjin, Shanghai, Ningbo, Guangzhou and Qingdao without an equity commitment; where a brand decides to incorporate, we help it separate what genuinely has to be owned from what can be contracted. Start with the China market entry guide for the sequence, and the glossary for the terms you will meet in registration and customs documents.
FAQ
Do I need a Chinese joint venture partner to sell in China? Almost never. The national negative list that still requires Chinese ownership covers 29 restricted entries, concentrated in agriculture, energy, telecommunications, media, education and healthcare — manufacturing has required no Chinese partner since 1 November 2024. Cross-border retail, general trade through an importer of record, bonded storage and most consumer categories are all open to a wholly foreign-owned company or an overseas entity.
Is a China joint venture still a distinct legal form? No. Since 1 January 2020 the Foreign Investment Law has governed all foreign investment, and it repealed the Equity Joint Venture Law along with the other two old foreign-investment statutes. A joint venture today is simply a limited liability company with both foreign and Chinese shareholders, organised under the Company Law. Chinese-foreign equity joint ventures established before 2020 had five years to keep their original organisational form, a window that closed on 31 December 2024.
What is the real difference between a joint venture and a WFOE? Both are Chinese limited liability companies. The difference is shareholding and, therefore, control: a WFOE is wholly owned by the foreign investor, while a joint venture splits equity with a Chinese shareholder. Registration time and the capital rules are broadly the same. The joint venture adds a co-owner to every decision, which is why it should be chosen for the capability a partner brings, not for legal necessity.
How much registered capital do I need, and when must it be paid in? Most sectors have no statutory minimum registered capital. Since the revised Company Law took effect on 1 July 2024, shareholders of a limited liability company must pay in their subscribed capital within five years of establishment. Companies registered before 30 June 2024 whose remaining contribution period runs beyond five years from 1 July 2027 must adjust it to five years or less by 30 June 2027, a deadline that applies to foreign-invested companies as well.
When is a Chinese partner genuinely worth the equity? When the licence, the key account, the distribution network or the government relationship cannot be rented. Most of what brands want from a partner — import declaration, licence holding, platform operation, retail distribution — can be contracted with an import agent, a Tmall partner or a distributor. Our default recommendation is to contract for 12 to 24 months, prove revenue, and only then consider converting the relationship into equity.
Sources
- Law of the People's Republic of China on Foreign Investment — NPC: pre-establishment national treatment plus negative list; the repealed 1979 joint venture law; five-year transition for existing structures
- 2024 edition of the national negative list — gov.cn: restrictions cut from 31 to 29, manufacturing cleared, in force 1 November 2024
- NDRC interpretation of the 2024 negative list — gov.cn: national list 93 to 31 entries and free-trade-zone list 122 to 27 across 2017–2021; services opening next
- State Council Order No. 784 on registered capital registration management — gov.cn: five-year contribution rule and the 30 June 2027 adjustment deadline
- Catalogue of Industries Encouraging Foreign Investment (2025 edition) — gov.cn: 1,679 entries, effective 1 February 2026
- MOFCOM: actual use of foreign investment, first half of 2026 — mofcom.gov.cn: 31,617 new foreign-invested enterprises, RMB 402.14 billion of FDI
- 2025 Action Plan for Stabilising Foreign Investment — gov.cn: services opening, reinvestment support, revision of foreign M&A rules