According to China Briefing Blog’s latest report, foreign stock exchanges are currently permitted to have their own representative offices (RO) in mainland China. The measures for the Administration of Foreign Stock Exchanges’ Representative Office in China took effect on July 1, allowing overseas bourses which meet specific requirements  to establish one RO in China.  Below is a summary of representative offices’ qualifications and obligations :

 1.       From a country or region that has comprehensive, established laws and regulations relating to financial supervision.

2.       In stable condition and in existence for at least 20 years

3.       Establishment of a physical location and completion of all necessary industrial and commercial registrations as well as tax registrations

4.       At least 50% of Chinese employees in the RO (more…)

On July 1, 2007, China reduced or eliminated tax rebates on 2.831 export categories, accounting for 37% of the total number of export items listed on customs tax regulations, in an effect to cool the overheating export growth and reduce trade friction brought by the enormous trade surplus. VAT export rebates for 553 “highly polluting or wasteful” commodities involving salt, fertilizer, leather ,etc,  are abolished’; Tax rebate on exports of 2,268 commodities which “tend to cause trade frictions” will be reduced by 17 percent, 13 percent, 11 percent, 9 percent and 5 percent  This move shows Chinese government’s decision to steer the country’s economy away from over dependence on export by manufacturing polluting or energy-intensive products companies sourcing or exporting from China express concerns over the seemingly unavoidable price increase of export commodities brought by the policy.

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A lot of Foreigners living in china are totally lost when it comes to paying their IIT( individual income tax). Chinese IIT is so complicated and hard to interpret that even some foreign tax consultants feel confused when they are handling tax issues for their expatriate clients in China. High mobility of expatriates, variations in interpretation and implementation of the IIT regulations as well as different rules among local tax authorities make things very complicated. One of our clients who owns a trading WFOE in Shanghai was very concerned about his IIT issue when the incorporation of his company was still in progress.  

To clarify a few frequent asked questions many HR professionals and foreign individuals living in China have raised over the past years, the State Administration of Taxation (SAT) issued the “ Notice on Issues in Implementation of IIT Regulations and Tax Treaty for Non-residents in China” (more…)

This is an article about company name in China from www.lawcase.org.  Click here to check out the original article.

1、what parts does a company name consist of?

With the exception of those prescribed by relevant laws, regulations and rules, a company name shall consist of, in the following order, “location”, “trade name (firm name)”, “industry” and “organization form”. The trade name in a company name shall include 2 Chinese Characters at least.
(1)Upon the approval of the State Administration for Industry and Commerce (SAIC), the enterprise that meets one of the following conditions may use a company name without “location”: With the establishment approved by the State Council; with the registration in SAIC; with the registered capital (or registered fund) not less than 50 million RMB; with other condition prescribed by SAIC.

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Posted by Vincent Cheung from www.pathtochina.com 

Decree of the the Ministry of Foreign Trade and Economic Cooperation, the State Administration of Taxation, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange[2003] No.3The Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (hereinafter referred to as the “Provisions”), reviewed and adopted at the First Ministry Meeting of the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China on January 2, 2003, is hereby published and will come into force on April 12, 2003.

Article 1 The Provisions are formulated in accordance with the laws and administrative regulations governing foreign investment enterprises and other relevant laws and administrative regulations to promote and regulate foreign investors’ investment in China introduce advanced technologies and management experience from abroad, improve the utilization of foreign investment, rationalize the allocation of resources, ensure employment and safeguard fair competition and national economic security.

Article 2 For the purpose of the Provisions, mergers and acquisitions of a domestic enterprise by foreign investors shall mean that foreign investors, by agreement, purchase equity interest from shareholders of domestic enterprise with no foreign investment (hereinafter referred to as the “Domestic Company”) or subscribe to the increase in the registered capital of the Domestic Company with the result that such Domestic Company changes into a foreign investment enterprise (hereinafter referred to as “Equity Merger and Acquisition”); or the foreign investors establish a foreign investment enterprise and then, through such enterprise, purchase the assets of a domestic (more…)

Below are some links useful in helping you choose the proper name for your Hong Kong company

http://www.cr.gov.hk/en/publications/docs/name-e.pdf

 http://www.cr.gov.hk/en/faq/faq02.htm  

http://www.icris.cr.gov.hk/csci

Provided by www.PathToChina.com“”Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business advisory service , please contact Vincent by vincent@pathtochina.com.

Shanghai: Tel: (8621) 5102.5279 Email: sales@PathToChina.com Suite 9B, 485 HeNan Road (N.) Shanghai 200071

USA: Tel: (303) 8006616 Email: sales@PathToChina.com 3801E, Florida Ave., Suite 412, Denver, Co. 80210

From www.hewn.com 

  On May 29, 2007, the State Administration of Foreign Exchange of China (SAFE) issued “Operating Procedures Clarifying Equity Finance and Return Investments by Domestic Residents Through Offshore Special Purpose Vehicles”, further clarifying its earlier-released “Circular No. 75”—which relates to foreign exchange control on financing and round-trip investment by domestic residents through offshore special purpose vehicles (SPVs). The Operating Procedures impose new compliance burdens on venture capital and private equity firms involved in transactions with Chinese “round-trip” investors—that is, Chinese individuals and companies who set up offshore SPVs to invest back into

China. The Operating Procedures are linked to the foreign exchange registration requirements that are set forth in both Circular No. 75 and the 2006 M&A Regulations. They provide a detailed roadmap of the documentation and intricate registration requirements for the multiple stages of SPV financing, including:

(1) setting up the offshore SPV; (2) injecting offshore assets into the offshore SPV;(3) establishing, acquiring or investing in a PRC onshore target through the offshore SPV (i.e., round-trip investment);

(4) changing or restructuring the offshore SPV.

The Operating Procedures state that they will come into effect immediately, although they are not yet available on SAFE’s official website. Most of the new rules, however, have been known for some time as “internal guidelines” among those in the

China venture capital and private equity communities.

 click here for the complete version (PDF) of the operating procedures  click here for the analysis of the operating procedures(PDF)  

Provide by www.PathToChina.com“”Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business advisory service , please contact Vincent by vincent@pathtochina.com.

Shanghai: Tel: (8621) 5102.5279 Email: sales@PathToChina.com Suite 9B, 485 HeNan Road (N.) Shanghai 200071

USA: Tel: (303) 8006616 Email: sales@PathToChina.com 3801E, Florida Ave., Suite 412, Denver, Co. 80210

From The Associated Press

China’s biggest city plans to tighten controls on purchases of property by foreign companies to help cool surging real estate prices, a report said Wednesday.“We no longer encourage foreign companies to purchase en-bloc properties rather than develop their own,” the state-run newspaper Shanghai Daily quoted Liu Jinping, head of the city’s Foreign Economic Relations and Trade Commission, as saying.“Stricter requirements are applied to the approval of such acquisition deals to prevent prices from being pushed up by speculative investors,” Liu said.The report gave no details on what further restrictions might be imposed. The government has already imposed special taxes and other controls, including a requirement that overseas institutional investors with investments in China totaling more than US$10 million hold at least half the investment as registered capital in a China-incorporated company, the report said.

Real estate purchases accounted for 4.4 billion yuan (US$580 million;€430 million), or nearly half, of all acquisition deals between local and overseas companies in 2006, up 44 percent over the previous year, it said.

Tentative Provisions For The Establishment of Foreign-invested Convention and Exhibition Companies  （Promulgated by the Ministry of Commerce on 13 January 2004 and effective 30 days after the date of promulgation.）

Article 1　These Provisions have been specially formulated in accordance with the PRC，Sino-foreign Equity Joint Venture Law， PRC，Sino-foreign Co-operative Joint Venture Law， PRC， Wholly Foreign-owned Enterprise Law and other relevant laws and regulations in order to encourage foreign companies， enterprises and other economic organizations （Foreign Investor（s）） to establish foreign-invested convention and exhibition companies in China to hold foreign economic and technology exhibitions and conventions of international scale and influence.  

Article 2　The State encourages the introduction of internationally advanced proprietary technology for organization of conventions， exhibitions and professional exchanges to establish foreign-invested convention and exhibition companies， promote the development of the convention and exhibition industry in China and create good social and economic benefits. The legitimate business activities and the lawful rights and interests of foreign-invested convention and exhibition companies in China shall be protected by the Chinese law. 

 Article 3　The Ministry of Commerce of the People’s Republic of China （MOFCOM） and its authorized departments in charge of commerce are the authorities in charge of the examination， approval and administration of foreign-invested convention and exhibition companies.  

Article 4　A foreign-invested convention and exhibition company established upon approval may engage in the following businesses in accordance with provisions： 1.       to organize and undertake upon entrustment various types of economic and technology exhibitions and conventions in China； 2.       to hold conventions outside China. Where the State has other provisions regarding the holding of exhibitions and conventions in or outside China， such provisions shall prevail.

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By Vincent Cheung

Aiming to find a balance between encouraging foreign investment and improving workers’ life quality to tackle the country’s serious side effects of the enormous economic growth. NPC Law Committee, enacted the long-awaited new China Labour Contract Law on June 29, offering a magnificent increase in the protection of the employee’s rights and entitling bigger power to the all-China Federation of Trade Unions (ACFTU). The law caused a growing concern about the potential less favorable investment environment in china. The US-China Business Council warned that the Draft Law may reduce employment opportunities for Chinese workers and negatively impact China’s competitiveness and appeal as a destination for foreign investment.”

Some companies had expressed concern that the new law is likely to increase wage costs, give unions too much influence and control over company rules and make it more difficult to dismiss employees for unqualified performance. After the first draft was approved in March 2006, Wal-Mart, Google, General Electric and other multinational corporations were  aggressively lobbying to restrict new rights for Chinese employees and some of the companies even threated to leave China for countries like Pakistan and Thailand if the law finally came into force. Chinese government will never risk the country losing her attractiveness for foreign investors. There are four reasons why the new labour contract law won’t have serious negative impact on

1.      Poor Enforcement  

The impact of the law lies in the government’s wiliness and ability to enforce it. Chinese people seem to be too flexible to be in full compliance with any rules. In some sectors, Chinese’s laws are even more rigorous than the laws of developed countries, but enforcement is the real problem.  With much probability, there will be a watered-down version of the new labor contract law when it comes to Local governments, who are much keen on attracting foreign investment and therefore has huge tolerance for foreign investors. Some officials of local governments dare to sacrifice everything for GDP growth.  We shouldn’t neglect that, in china, where independent worker’s union is illegal, (more…)