Microsoft has signed an investment agreement with Tata Consultancy Services (TCS), completing a deal announced last year to set up a joint-venture IT outsourcing company in China.

Under the terms of the investment agreement, Microsoft will hold a 10 per cent stake in the venture, called TCS China. The size of Microsoft's investment was not confirmed but the remaining shares in TCS China are split between TCS, which holds 65 per cent, and three Chinese partners, who hold a combined 25 percent of the shares.

TCS and Microsoft announced plans in June 2005 to set up an outsourcing company in China. At that time, the venture was billed as a role model for the development of China's software industry. Based in Beijing's Zhongguancun Software Park, TCS China offers IT outsourcing and other services to companies around the world, including the U.S., Europe, and Asia.

In addition to TCS China, TCS has its own outsourcing operations in China, including a development center in Hangzhou, in eastern China, and offices in Beijing and Shanghai. Those facilities employ a staff of 600, the company said.