Deed tax exemption clarified

The China State Administration of Taxation issued on May 26, 2008 the Circular on Deed Policy relating to Assignment of Assets to Wholly Owned Subsidiary from Parent Company, clarifying a situation where deed tax is exempted.

The circular is to the effect that, where a company increases the registered capital of its wholly owned subsidiary through contributing…

Corporate governance structure of foreign invested companies

Chinese foreign investment regulation originated earlier than the enactment of the first Company Law of China (1994) and this together with other reasons gave rise to the irregular corporate governance structure of foreign invested enterprises (which term generally excludes foreign invested companies limited by shares) where there was generally no …

Supreme court seeking comments to judicial interpretation draft relating to condominium ownership

On June 16, 2008, the People’s Supreme Court of China published the Interpretation on Several Issues regarding Application of Law in Trial of Cases Involving Condominium Ownership (the “Condo Interpretation”) and asked for public comments thereof. The original Chinese text of the draft Condo Interpretation is on the following website:…

changes to be approved before amending registration

Since many documents especially the articles of association involved in setting up a foreign invested company have to be approved by foreign investment department (“Approving Authority”) beforehand prior to registering the company with the company registration agent, the State Administration of Industry and Commerce and its local counterparts…

Baby shareholder established by a decided case

A court in Minhang District in Shanghai delivered a judgment that aroused interests among the public, in which the court held the two babies, one of 5 years old and the other of 6 years old, were entitled to be registered as shareholders of a company. While the copy of the judgment is not available, the information from the Internet suggested that the company is …

Central government stepped up measures to boost property market

Yesterday, China state cabinet issued the Several Opinions on Boosting Healthy Development of the Property Market (the “Opinions”), in a bid to boost the bearish property market which had been the engine industry for the Chinese economy.

The key point in the Opinions that grabs common homeowners’ attention is the change in policy regarding…

Guidelines for pursuing foreign investors’ liabilities in the case of abnormal capital withdrawal

On November 19, 2008, four Chinese ministries, namely, Ministry of Commerce, Ministry of Foreign Affairs and Ministry of Justice jointly issued a circular, Guidelines for Cross-border Pursuit and Litigation by Chinese Parties in respect of Abnormal Capital Withdrawal by Foreign Investors (“Guidelines”), an attempt to curb deviant withdrawal…

State Council has published the newly revised Regulations of the People’s Republic of China on Foreign Exchange (“Regulations”) on August 5, 2008, which immediately attracted attentions from around the world and on August 8, 2008, Financial Times ran two commentaries relating to the revision on its Chinese version website.

It is an…

SDRC new circular aiming to rein in fake investment

On July 8, 2008 the State Development and Reform Commission issued a circular, namely, Circular on Further Strengthening and Regulating Foreign Invested Project Management (“Circular”), in a bid to rein in the flood of speculative hot money into China by means of fake joint venture, submission of false total investment amount or setting up …

Your alternative business presence in China: representative office and branch

While the establishment of foreign invested enterprises seems to be the mainstream option for most foreign investors to make business presence in China, there are actually two other options for that purpose, namely, the representative office and enterprise branch.

1. Representative Office

Dated back to year of 1980, the State Council of China promulgated…