Business in China

Service industry is becoming a focus of the Chinese government and its development will be accelerated in the near future. In accordance with a circular released by the administration office of the State Council on March 13, 2008:

1. It is clarified that the minimum registered capital of a service company may be RMB 30,000 only, unless a higher amount is required by the law expressly. Restrictions will be relaxed also with regard to business locations, investors’ qualifications and business scopes;
2. Private investment in infrastructure projects will be further encouraged; Pledge over the right to collect fees (a popular way of security for financing in high-way construction projects) will be allowed to use in other kinds of infrastructure projects, such as supply of water, hot and gasoline, disposal of waste water and solid wastes;
3. Service companies are encouraged to adopt modern operational forms such as chain business, franchising, e-commerce, logistics and delivery;
4. Qualified service group will have the first priority to obtain approvals from the China Banking Regulatory Commission (CBRC) for the establishment of finance company or other kinds of non-banking financial institutions;
5. Tax preferential treatment will be granted to companies engaging in software development, information technology, intellectual property rights service, engineering consultation, technology service, business process outsourcing (BPO) and logistic service; and
6. Foreign BPO training companies are encouraged to set up wholly foreign owned training institutions in China.
In this circular, the State Council urges related authorities to formulate implementing policies and rules with regard to the above-listed aspects.