Prof. GAO yongfu Shanghai University of International Business and Economics May 16-17, 2013
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Company Laws in China --- Establishing a Company, Branch Office in China Prof. GAO yongfu Shanghai University of International Business and Economics May 16-17, 2013
Prof. GAO yongfu Shanghai University of International Business and Economics May 16-17, 2013
Prof. GAO yongfu Shanghai University of International Business
and Economics May 16-17, 2013
Slide 2
Company Laws in China --- Establishing a Company, Branch Office
in China 1. To Know the Company Laws in China 2. What Kind of
Company Do You Want to Establish? 3. How to Establish a Company
Wholly-owned by Yourself? 4. How to Establish a Joint-venture
Company? 5. How to Establish a Financial Company?
Slide 3
1. To Know the Company Laws in China Company Law of the PRC Law
of the PRC on Chinese-foreign Equity Joint Ventures Law of the PRC
on Chinese-Foreign Contractual Joint Ventures Law of the PRC on
Foreign-capital Enterprises Regulations of the PRC on
Administration of Registration of Companies
Slide 4
1. To Know the Company Laws in China Administrative License Law
of the PRC Commercial Banking Law of the PRC Insurance Law of the
PRC Securities Law of the PRC Measures on the Administration of
Foreign-capital Financial Institutions Representative Offices in
China
Slide 5
2. What Kind of Company Do You Want to Establish? A limited
liability company or a joint stock company limited ? A
manufacturing company or a financial company ? Catalogue for the
Guidance of Foreign Investment Industries (Amended in 2011) and
Chinas Commitments in GATS of the WTO A Joint-venture Company or a
Company Wholly-owned by Yourself? A Company, or a Branch
Office?
Slide 6
3. How to Establish a Company Wholly-owned by Yourself? The Law
Advantage and Disadvantage Basic Requirements Procedures
Slide 7
3. How to Establish a Company Wholly-owned by Yourself? The Law
Company Law of the PRC Law of the PRC on Foreign-capital
Enterprises Chinas Commitments in GATS of the WTO
Slide 8
3. How to Establish a Company Wholly-owned by Yourself?
Advantage Making decisions by yourself Wholly control Disadvantage
More risks Less familiar with the investment environments
Prohibited by law
Slide 9
3. How to Establish a Company Wholly-owned by Yourself? Basic
Requirements To help the development of China's national economy.
To encourage the establishment of foreign-capital enterprises that
are export-oriented or technologically advanced. Enterprises with
foreign capital shall abide by Chinese laws and regulations and may
not engage in any activities detrimental to China's public
interests.
Slide 10
3. How to Establish a Company Wholly-owned by Yourself?
Procedures Making the application Examination and approval by the
government department The authorities in charge shall decide
whether or not to grant approval within 90 days Applying to the
administrative department for industry and commerce for
registration in order to obtain a business license.
Slide 11
4. How to Establish a Joint- venture Company? The Law Advantage
and Disadvantage Basic Requirements Procedures
Slide 12
4. How to Establish a Joint- venture Company? The Law Company
Law of the PRC Law of the PRC on Chinese-foreign Equity Joint
Ventures Law of the PRC on Chinese-Foreign Contractual Joint
Ventures Chinas Commitments in GATS of the WTO
Slide 13
4. How to Establish a Joint- venture Company? Advantage
Familiar with the invest environments Fast progress Share the risks
Disadvantage More time needed More disputes possible
Slide 14
4. How to Establish a Joint- venture Company? Basic
Requirements The joint venture agreement, contract and articles of
association shall be submitted to the State's competent department
for examination and approval. An joint venture shall take the form
of a limited liability company. The proportion of the foreign joint
venture's investment in a joint venture shall be, in general, not
less than 25 percent of its registered capital. An equity joint
venture shall have a board of directors
Slide 15
4. How to Establish a Joint- venture Company? Procedures Making
the application Examination and approval by the government
department The authorities in charge shall decide whether or not to
grant approval within 90 days Applying to the administrative
department for industry and commerce for registration in order to
obtain a business license.
Slide 16
5. How to Establish a Financial Company? The Law
Characteristics Basic Requirements Procedures
Slide 17
5. How to Establish a Financial Company? The Law Company Law of
the PRC Commercial Banking Law of the PRC Insurance Law of the PRC
Securities Law of the PRC Measures on the Administration of
Foreign- capital Financial Institutions Representative Offices in
China Chinas Commitments in GATS of the WTO
Slide 18
5. How to Establish a Financial Company? Characteristics Very
important in economic development of a country More restriction
High requirements Restricted national treatment Commitments made by
oneself
Slide 19
5. How to Establish a Commercial Bank? Basic Requirements The
establishment of a commercial bank shall require the examination
and approval by the People's Bank of China. The establishment of a
commercial bank shall satisfy the following requirements 1 having
its statute in pursuance of this Law and the Company Law of the
People's Republic of China 2 having the minimum registered capital
defined by this Law
Slide 20
5. How to Establish a Commercial Bank? Basic Requirements 3
having chairman of directors president general manager and other
senior managerial personnel with expertise and professional
experience required by their positions 4 having complete
organization and management 5 having up-to-standard business site
safety measures and other facilities relevant with the business
thereof.
Slide 21
5. How to Establish a Commercial Bank? Procedures The applicant
shall apply to the People's Bank of China for the establishment of
a commercial bank by submitting the documents and information
listed below 1 an application for the establishment of a commercial
bank specifying the name location registered capital and business
scope of the bank thereof 2 a feasibility study report 3 other
documents and information required by the People's Bank of
China.
Slide 22
5. How to Establish a Commercial Bank? Procedures The applicant
shall fill a formal application form and submit the documents and
information listed below 1 a draft of the statute of the commercial
bank to be established 2 qualification documents of the senior
managerial staff to be employed 3 a certificate of capital
confirmation from a legitimate capital confirmation authority 4 a
list of the names capital contributions and shares of the share
holders of the commercial bank
Slide 23
5. How to Establish a Commercial Bank? Procedures 5 credit
certificate and other relevant information of the share holders
each holding more than ten percent of the registered capital of the
commercial bank 6 the guideline and plan for the operation of the
commercial bank 7 information of the business site safety measures
and other facilities relevant with the business of the commercial
bank 8 other documents and information required by the People's
Bank of China.
Slide 24
5. How to Establish a Insurance Company? Basic Requirements The
establishment of an insurance company is subject to the approval of
the financial supervision and regulation department. To establish
an insurance company, the following are required: 1. Articles of
Association in compliance with this Law and the Company Law; 2. a
minimum registered capital as prescribed in this Law;
Slide 25
5. How to Establish a Insurance Company? Basic Requirements 3.
senior management with professional knowledge and operational
experience; 4. a sound organizational structure and management
systems; and 5. business premises and other facilities commensurate
with an insurance business in compliance with relevant operational
requirements.
Slide 26
5. How to Establish a Insurance Company? Procedures The
applicant shall submit the following documents and materials: 1. a
formal application letter for the establishment of an insurance
company on which the name, registered capital and the scope of
business of the proposed insurance company shall be specified; 2. a
feasibility study report; and 3. other documents and information
requested by the financial supervision and regulation
department.
Slide 27
5. How to Establish a Insurance Company? Applicants shall
submit a completed form of formal application form together with
the following documents: 1. the Articles of Association of the
company; 2. a list of shareholders and their shares; 3. a
certificate of the credit standing and relevant information of
those shareholders holding more than ten (10) percent of the
company's shares; 4. a certificate verifying the paid-up capital
issued by a legally authorized institution; 5. resumes and evidence
of qualification of the proposed senior management;
Slide 28
5. How to Establish a Insurance Company? 6. operation strategy
and business plan; 7. details of business premises ; and 8. other
documents and information requested by the financial supervision
and regulation department. The financial supervision and regulation
department shall make a decision approving or disapproving the
application, within six (6) months. An insurance company shall be
issued an insurance license by the approving department and obtain
a business license from the Bureau of Administration for Industry
and Commerce.
Slide 29
5. How to Establish a Security Company? Basic Requirements The
establishment of a securities company must be examined and approved
by the State Council's securities regulatory body. Dividing
securities companies into two: comprehensive securities companies
and brokerage securities companies.
Slide 30
5. How to Establish a Security Company? Basic Requirements The
establishment of a comprehensive securities company must conform
with the following requirements: (1) A minimum registered capital
of 500 million yuan; (2) Qualified managerial personnel and
employees; (3) A fixed operational site and up to standard trading
facilities; (4) A perfect management system and a standard
operational system for its business and brokers. A brokerage
securities company must have a minimum registered capital of 50
million yuan.
Slide 31
5. How to Establish a Security Company? Procedures The
applicant shall apply to the State Council's securities regulatory
body. Being examined and approved by the State Council's securities
regulatory body. Issuing an securities license by the approving
department. Obtaining a business license from the Bureau of
Administration for Industry and Commerce.