Foreign-invested partnerships: A new vehicle for investments?

Steady economic growth means China has always been an attractive choice as an investment destination. Investors are also familiar with the investments that the country has to offer. Vehicles like the Sino-foreign equity joint ventures (EJV), Sino-foreign cooperative joint ventures (CJV) and the wholly foreign-owned enterprise (WFOE) have long been the pillars of foreign direct investment.

However, in 2009, China's premier Wen Jiabao signed off the Measures for the Administration of the Establishment of Partnerships in China by Foreign Enterprises or Individuals (外国企业或者个人在中国境内设立合伙企业管理办法). The Measures set out general regulatory principles guiding the establishment of partnerships and marked the opening of an alternative fourth option for foreign investors. Despite being around for two years and favoured by an increasing number of investors, the foreign-investment partnership (FIP) structure is not as widely known as its fellow investment vehicles, the WFOE, EJV and CJV.