The Limit to the Access of Foreign-invested Leasing Companies Lessened
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| 7/7/2005 9:5:27 Jing Bao |
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The previous minimum access requirement for foreign-invested leasing companies was 5 million US dollars, which now has become ¡°without special requirements¡±. Multinational companies, including General Electrics (GE), are taking aim at hundred of billions of profits in China¡¯s leasing market.
From March 5, foreign investors have been allowed to set up solely foreign-invested enterprises in China to undertake leasing businesses. Now, many foreign banks, professional leasing companies and manufacturing enterprises are ready to offer application to the Ministry of Commerce for establishment of solely foreign-invested leasing companies. At the same time, it is very likely that the domestic leasing industry, previously slow in development, may completely be activated by the access of foreign investment.
There is no restriction as to the minimum amount of registered capital of foreign investment
According to China¡¯s WTO commitments, China should allow for setting up solely foreign-invested subsidiary companies within 3 years upon its accession to the WTO in terms of leasing service. It has been known that the new ¡°Measures for Management of Foreign-Invested Leasing Industry¡± with 23 articles totally has adopts detailed regulations on the form of investment, examination and approval procedure, business rules and supervision of foreign-invested leasing industries. Thus, the new measures for management allows for establishing solely foreign-invested enterprises to engage in leasing business and financial leasing business.
The access threshold for foreign investment is also lowered considerably. According to the ¡°Measures for Management of Foreign-Invested Leasing Industry¡±, the minimum capital requirements for foreign investors of the foreign-invested leasing companies and foreign-financed leasing companies have been uniformly reduced to 5 million US dollars, which is consistent with the content of China¡¯s WTO commitments. Meanwhile, the minimum amount of registered capital of foreign-invested financial leasing companies has been reduced from the previous 20 million US dollars to 10 million Us dollars, and the minimum amount of registered capital of foreign-invested leasing companies has also reduced from the previous 5 millions US dollars to without special restrictions.
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