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China State Council issued decisions which cancelled the time limits

for foreign investors to pay up capital

1 March 2014
China State Council issued on February 19 the "Decisions to Cancel and Amend some Administrative Regulations", whereby the Provisions on Capital Contribution by Sino-foreign Joint Venture Parties and its supplementary provisions are cancelled, and eight (8) other administrative regulations are amended.
The main purpose of the State Council Decision is to match up the Amendments to the PRC Company Law which will be implemented as from March 1, 2014. The major changes pursuant to the State Council Decision in relation to foreign investment include inter alia that the following time limits for foreign investors to pay up the registered capital or share/asset purchase price (which have been implemented for many years) are cancelled:
1. The cancelled time limits for paying up the registered capital include:15% of the registered capital of a foreign investment enterprise should be paid up by investors within 3 months after the business license of that foreign investment enterprise being granted, and the balance should be paid up within 2 years after the said business license being granted;
2. The cancelled time limits for paying up the share/asset purchase price include: Full amount of purchase price should be paid up within 3 months after the business license of the foreign investment enterprise being granted; in case an application for extension being submitted to and approved by relevant authority, the time limits could be extended as follows: at least 60% should be paid up within 6 months after the business license of the foreign investment enterprise being granted, and the balance should be paid up within 1 year after the said business license being granted.

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Disclaimer
Any legal information contained in this newsletter is general in nature and laws and regulations are changing from time to time and compliance will always depend upon the particular circumstances. We have not attempted to give exhaustive descriptions of law or to give a legal opinion on specific legal issues. You should not rely on this newsletter as a legal advice for any particular purpose.

 

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