Sino-Foreign Equity Joint Venture is also called equity joint venture. It is a corporation jointly invested and incorporated by foreign companies, and other economic organizations or persons and Chinese companies or other economic organizations, which is featured by joint contribution, joint operation of all parties to the joint venture, and sharing of risk, profits and losses in proportion to their respective contributions towards the registered capital to company.

Although the demands from overseas investors for creation of enterprises with foreign investment in the form of joint ventures are reducing, some special industries are still relying on this mode of joint venture incorporation.

• Sharing resources and complementation of advantages, giving full play of the network and the famous brand already established by the Chinese enterprise, as well as smooth entry into the Chinese market
• Utilizing the geographic advantage of the Chinese enterprise for reasonable and lawful reduction of various fiscal charges and large reduction of operating cost
• Entitled to foreign investor preferences

• Value-added Tax
  
  
  • The foreign joint venture, being a general taxpayer, is entitled to the tax "Exemption, Credit and Tax Rebate" policies on the exported goods produced by itself, where :
    
    
    • Shall be exempt from value-added tax production and sales payable on the export
    • "Tax Rebate" shall be the rebate of the remaining tax after crediting
  • The foreign joint venture productive enterprise, being a small-scale taxpayer, is entitled to VAT exemption but no refund on its export products
  • Home equipment purchased in the aggregate investment, if falling within the tax-free catalog, shall be entitled to full refund of the value-added tax on the purchase of the home equipment
• The especial support and encouraged development industry or project shall be levied at the corporate profits tax.
• The Resident Corporation does not need to levy the corporation profit tax for the bonus stock profit by invests at other resident corporation.
• National debt accrual does not need to levy the corporation profit tax.
• The profit of invest in agriculture, forest, herd and fish culture does not need to levy the corporation profit tax.
• The Especial Support High-Technology Advanced Corporation enrolled in Special Economic Zones (Shenzhen, Zhuhai, Shantou, Xiamen and Hainan Especial Economic Zone) and New Pudong District in Shanghai after 1 January 2008 does not need to levy the corporation profit tax since the first annual gets income taxable year till the second taxable year. From the third year to fifth year shall be levied the halve corporation profit tax.