Until recently, there were no guidelines on how to deal with foreign investment, as China is restrictive towards foreign investors. After Mao Zedong`s death in 1976, initiatives in foreign trade were implemented, and the law applicable to foreign direct investment was clarified in 1979, while the first Sino-foreign investment took place in 2001.  The law as a whole has improved since then. If the joint venture is its own separate business unit, it pays its own income taxes based on the form of business – e.B. a partnership – when it was created. If it is an unregistered joint venture, all profits must be made binding by the companies that signed the joint venture agreement. Companies form joint ventures for many different reasons, including the following: Once the joint venture (JV) has achieved its purpose, it can be liquidated or sold like any other company. For example, in 2016, Microsoft Corporation (NASDAQ: MSFT) sold its 50% stake in Caradigm, a joint venture it formed in 2011 with General Electric Company (NYSE: GE). The joint venture was created to integrate Microsoft`s amalga Enterprise Healthcare Data and Intelligence System and various management technologies. Microsoft has now sold its stake in GE, ending the joint venture. GE is now the sole owner of the business and can sue the business at will.
A joint venture is not required to register with a state or federal government. .