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● Local business licensing requirements.● Trademark protection and registration of fictitious names.● Available incentives for foreign investors.● Banking requirements and available services.Investing in and Joint Ventures with Existing BusinessesA Chinese company might choose to invest in or acquire an existing U.S. company or establish a joint venture with a U.S.company not only to reduce the required time and capital otherwise needed to enter the U.S. market, but also to acquireexisting know-how, human resources, equipment and other strategic value. A joint venture may also reduce costs andotherwise expedite market entry or product development.Joint Ventures / Strategic AlliancesGenerally speaking, a joint venture is a joint business arrangement between two or more parties to accomplish a business goal.Contractual arrangements such as strategic alliances, joint research and development projects may also be considered jointventures.Chinese companies may find a joint venture to be an expedient means to gain access to capital, technology, equipment,human resources, sales and distribution networks. Joint ventures can provide companies from China and the U.S. withmutual benefits derived from the sharing of strategic strengths. A joint venture with a Michigan corporation can simplifythe process of Chinese entry into global markets. For example, with new Chinese automobile technology and Michigan’s automotive background, joint ventures between Chinese and Michigan’s companies would be mutually beneficial.Investing in a U.S. CompanyU.S. companies may seek investment by a Chinese company for both strategic and for financial reasons. For example,Michigan companies in markets undergoing restructuring may need additional funds in order to reduce existing debt,finance facility upgrades, or fund business operations and product development. For some Michigan companies, equityinvestors may be a more economical source of funding companies than debt financing. In some circumstances, Chinesecompanies may be preferred equity investors because of the strategic value that the investor may bring to the business interms of know-how or new business relationships.Doing business in MichiganFor Chinese companies, equity investments in Michigan companies can provide not only an opportunity for capitalgains, but also a doorway to begin relationships with potential strategic partners and acquisition targets. Michigan laws,for example, permit a number of very creative legal tools for strategic investors engaging in private equity transactionswhether under the scenario of a venture capital investment, financial support of a financially distressed company orotherwise. Many Michigan companies are listed on public markets. Because the U.S. and Chinese equity markets can bevery different, it is advisable that Chinese investors consult with financial advisors, tax consultants and attorneys at theearly stages of exploring potential investments.35