China FIPE Formation Service
Hotline: 86-755-82143422 Email: anitayao@citilinkia.com
China Investment Portfolio is one of ATAHK's China investment services. Investment is time, energy, or matter spent in the hope of future benefits actualized within a specified date or time frame. Investment has different meanings in economics and finance. In economics, investment is the accumulation of newly produced physical entities, such as factories, machinery, houses, and goods inventories. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, among other things, to inflation risk. It is indispensable for project investors to identify and manage the risks related to the investment.
China investment guide
China investment still keeps a strong attraction for oversea investors. Some one may ask the reasons for this saying. The statistics show that the foreign investment capital in China reaches to 116 billion dollar in 2011, maintaining a stable growth in these years, even though during the current international financial crisis. It demonstrates that China maintains a kind of relatively strong stability during the current financial crisis, compared with other countries. Since the reforms of the late 1970s, the Chinese government has created an increasingly sound investment environment for foreign investment, and China’s foreign investment attraction is actually continually enhanced. It is necessary to find a professional company to give the guidance before the investment in China.
The investors who want to invest in China must consider how to invest in China, where to invest in China, how to set up business in China. Before stepping in China business, it’s essential that investors to China start a series of study, including China investment portfolio, project feasibility study, project analysis, market study, business plan, project financing, investment opportunities, due diligence report and so on.
Forms of business start-up for China investment
The foreign investments are basically divided into direct investment and other means of investment. The direct investment, which is widely adopted, includes Sino-foreign joint ventures, joint exploitation and exclusively foreign-owned enterprises, foreign-funded share-holding companies and joint development. The other means of investment includes compensation trade and processing and assembling.
Sino-foreign joint ventures
Sino-foreign joint ventures are also known as share-holding corporations. They are formed in China with joint capitals by foreign companies, enterprises, other economic organizations and individuals with Chinese companies, enterprises, other economic organizations and individuals. The main feature is that the joint parties invest together, operate together, take risk according to the ratio of their capitals and take responsibility of losses and profits. The capitals from different parties are translated into the ratios of capitals, and in general the capital from foreign party should not be lower than 25%.
The Sino-foreign joint ventures are among the first forms of China's absorption of foreign direct investment and they account for the biggest part. At present they are still a great part in the absorption of foreign investments.
Cooperative businesses
Cooperative business is also called contractual cooperation businesses. They are formed in China with joint capitals or terms of cooperation by foreign companies, enterprises, other economic organizations and individuals with Chinese companies, enterprises, other economic organizations and individuals. The rights and obligations of different parties are embedded in the contract. To establish a cooperative business, the foreign party, generally speaking, supplies all or most of the capital while Chinese party supplies land, factory buildings, and useful facilities, and also some supply a certain amount of capital, too.
Wholly foreign-owned enterprises
Exclusively foreign-owned enterprises, which are totally invested by foreign party in China by foreign companies, enterprises, other economic organizations and individuals in accordance with laws of China. According to the law of foreign-funded enterprises, the establishment of foreign enterprises should benefit the development of our national economy and agree with at least one of the following criteria: the enterprises must adopt international advanced technology and facility; all or most of the products must be export-oriented. The foreign funded enterprises often take the form of limited liability.
Joint exploitation
Joint exploitation is the abbreviation of maritime and overland oil joint exploitation. It is a widely adopted measure of economic cooperation in the international natural resources field. The striking features are high risk, high investment and high reward. The joint development is often divided into three steps: exploitation, development and production. Compared with the other three means mentioned above, joint cooperation accounts for a small ratio.
Foreign-funded share-holding companies
Foreign companies, enterprises, other economic organizations and individuals can form foreign funded share-holding companies in China with Chinese companies, enterprises, and other economic organizations. The total capital of the share-holding company is formed by equal shares，shareholders will take due responsibilities for the company according to shares purchased; company will take responsibilities for all its debts through all its assets and the Chinese and foreign shareholders will hold the shares of the company. Among them, the shares purchased and held by foreign investors account for more than 25% of the total registered capital of the company. Limited company can be founded either by means of starting-up or raising, and the limited liability company invested by the foreigners can also apply to turn into share-holding companies. The qualified enterprises can also apply to issue A & B share and list abroad.
New types of foreign investment
While expanding areas and opening-up domestic market, China is also exploring and expanding actively its new types of utilizing foreign investment such as BOT (Build-Operate-Transfer), investment companies and so on. Since multinational merger and acquisition has become the major type of international direct investment, Chinese government is now researching and enacting related policies so as to facilitate the foreigners to invest in China by means of merger and acquisition.
China Investment -- Financial Institutions
The central bank of China is the People's Bank of China (PBOC) that is in charge of approving, regulating and supervising domestic and foreign financial institutions. Other government authorities also play certain roles in the financial system. Those authorities include the Ministry of Finance (MOF) and the State Administration for Exchange Control (SAEC). The latter one is a bureau under PBOC and is in charge of foreign exchange control.
China Investment -- Insurance Market
The Chinese insurance market is now opened not only to domestic companies but also to foreign companies. There are several national-wide insurance companies as well as regional ones. Types of those insurance companies include state-owned, joint stocks and sino-overseas joint ventures.
China Investment -- Labor cost
Several years ago, many foreigners step into China market on account of the cheap labor cost. However, Chinese labor cost has soared in 2012, despite a slowdown in a border economy during the current financial environment.
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China Investment -- Government policies
Since the reforms of the late 1970s, the Chinese government has created an increasingly sound investment environment for foreign investment. Now the government provides more and more preferential polices for the enterprises during the current financial environment. Preferential policies for China Western Development are mainly focused on taxation, land and favorable condition for foreign capital utilization.
China Investment -- Education
Education in China today has been developing rapidly. In many provinces, it is compulsory and free . Most children start school at the age of six. They attend five years at elementary school and six years at high school, a student can start his higher education in a two-year college, a four-year college, a university or specialized professional school.
China’s foreign investment attraction is actually continually enhanced, in some degree, China investment environment is improving. The competition is intense among the foreign investors because hundreds of thousand of foreign companies are operating in China. No longer can foreign investors rely on good connections or having a novel product to win success in China, they need to ensure all the fundamental aspects of their business are sound. ATAHK Group Limited is a diversified international company, offering the services of China company formation professionally.
Contact us
For further queries, you are welcome to contact ATAHK anytime, anywhere by simply visiting ATAHK’s website www.3737580.net, or calling at 86-755-82143422, or emailing to anitayao@citilinkia.com .