Encourages foreign investors for good or bad

Further encouragement for foreign investors

May 17 - The State Administration of Industry and Commerce issued an announcement on May 13, 2010 to continue encouraging foreign investors to invest in China and promising to improve the overall investment environment for foreign-funded companies.

The announcement encourages foreign-funded companies, among other things, to organize their corporate structure as a group, so that the word “group” can then also be included in the company name. Furthermore, foreign-financed companies will in the future be able to use financial claims as deposit capital after examination by the foreign exchange administration authority.

Only foreign-funded companies operating in the service or high-tech sector with a capital contribution of RMB 30 million (approx. EUR 3.6 million) can now use the word “China” in the middle of their company name. So far, this has only been possible for companies with a capital contribution of RMB 50 million (approx. EUR 5.9 million). Among other things, it will be possible for foreign-financed companies and their legal service branches to register additional operational branches directly with the local registration authorities.

The announcement also indicates that foreign-funded companies will be encouraged to set up partner companies with Chinese companies in order to optimize their capital structure, discover investment opportunities in central and western China and develop stronger cooperation with the economic border zones.

If you have any questions about economic issues, taxes, accounting and business start-ups in China, please contact Mr. Richard Hoffmann ([email protected]), or Mr. Olaf Griese ([email protected]) from the consulting firm Dezan Shira & Associates.

Do you ever have problems with Chinese accounting or economic terms? For registered users, we now offer a free translation list of the most important accounting and business terms for Download at. In addition to the German term, the list offers you the translation into Pinyin and English as well as the Chinese characters.