The following case illustrates how we helped a member company to navigate an exceptionally complex Joint Venture (JV) deregistration in China—an issue closely linked to one of the top regulatory business challenges identified in our Business Confidence Survey 2025/2026: legal risks due to lack of transparent regulatory framework (15%).
The case is especially relevant against the fact that more than half of German companies increasingly consider partnerships with their local peers, including also Joint Ventures.
Background and challenge
A German company was in a JV with a Chinese shareholder — a subsidiary of a formerly public listed Chinese group, which had been delisted and finally ceased normal operations after encountering financial distress. The German company tried hard to liquidate the JV to avoid further commercial risks.
The JV formally completed liquidation steps, settled liabilities, obtained tax clearance, and submitted full deregistration documentation. Preliminary reviews identified no technical issues.
However, despite a clean compliance record, the deregistration application was stalled for more than 18 months since their submission. The local regulators, including the Administration for Market Regulation (AMR) and district-level bureaus, did not approve deregistration because of the Chinese shareholder’s prior high‑profile status and financial problems. They indicated that approval from a city municipal-level special task force or a provincial supervisory group was required but offered no clear timeline.
The prolonged uncertainty left the German shareholder of the JV exposed to ongoing legal and commercial risks and being unable to conclude the company’s affairs. Therefore, the German shareholder reached out to us for seeking support.
Our approach
Several steps were initiated by us to reactivate the deregistration process:
- Conducted a detailed review of all documents the JV has submitted for a better understanding of the case, including all correspondence with authorities to identify the precise causes of delay.
- Engaged directly with local regulators — including the AMR, local bureaus of commerce and relevant district authorities — to get a better understanding of their concerns, to learn which decision‑making offices were involved, and what documentation was needed to address their concerns.
- Drafted and submitted an official support letter with supporting materials, and escalated the case through city municipal and provincial commerce authorities to raise awareness and request timely consideration.
- Maintained continuous follow‑up and coordinated communications between the company and government offices until a resolution pathway was confirmed.
- As a result of this coordinated effort, a municipal government office (at the level of Vice Secretary‑General) granted the required special approval, enabling the deregistration to proceed along regular administrative procedures.
Outcome and impact
Within two months of our intervention — after more than 18 months of being stalled — the joint venture’s deregistration was successfully completed. This outcome was enabled by the JV’s comprehensive documentation, targeted advocacy and finally constructive engagement from local government offices.
This case demonstrates that deregistering a JV with a listed Chinese shareholder is particularly complex, often requiring coordinated efforts across multiple government levels.
In times where more German companies opt for partnerships with their local peers, including also in the form of joint ventures, we advocate for a transparent, predictable and consistent regulatory framework that allows for being able to form such partnerships. We continue to support German companies in navigating complex regulatory processes, ensuring their concerns are effectively brought to Chinese authorities and representing their interests to the Chinese governments.
