Requirements cut for business startupsReform will help people set up their own businesses
China has removed the minimum capital requirements for registering a new company,among other reforms aimed at lowering the threshold for business startups and stimulatingthe private economy.
The minimum registered capital requirement of 30,000 yuan ($4,900) to start a limitedliability company will be removed, as will the 100,000 yuan requirement for an individualcompany and the 5 million yuan requirement for an incorporated company.
There will also be no more limitations on the proportion and duration of the paid-in capital,and it will be no longer a matter of business registration. Instead, the amount and durationof registered capital will depend on the founder of the company.
The reforms were announced at an executive meeting of the State Council led by PremierLi Keqiang on Friday.
"By widening the market access and establishing a transparent and efficient moderncompany registration system, we aim to further streamline government administration,create fair competition and support smaller businesses, especially innovative enterprises,"Li said.
The measures will help expand private investment, strengthen the foundation for theeconomic recovery, as well as create more job opportunities, Li said.
The latest reforms also involve replacing the annual inspection of companies with areporting system that can be viewed online to increase the transparency of businessoperations. Requirements for company registration address will also be simplified.
In the meantime, Li called for advancing the building of an integrity system: Enterpriseswith deceptive practices will be put on a "blacklist" that will be publicly available.
Ju Jinwen, an expert on private economy at the Chinese Academy of Social Sciences, hailedthe reform measures as "long-awaited breakthroughs" in company registration.
He said the minimum requirement of registered capital was meant to protect the interestof creditors, but it performed little function as in many cases the registered capital wasactually borrowed.
"The reform solves the issue by lowering the threshold but strengthening midlevelsupervision. It is in line with many other market-oriented reforms pushed forward by thenew leaders," he said.
"Its ultimate goal is to inspire entrepreneurship among private investors," Ju said.
From 2006 to 2012, the proportion of private investment as a percentage of total volumein China has increased from 49.8 percent to 61.4 percent.
"The changes made by the State Council in the registration system of enterprises is likelyto attract more small and micro-sized enterprises with quite low registered capital, and willcontribute to the recovering economy," said Zhang Beilei, the general manager of WenzhouGaotian Shoe Co, which exported nearly 50 percent of its products to regular clients inJapan.
Zhang added that the reform was expected to create fair competition, which wouldencourage private enterprises to manufacture higher quality products with moreinnovative technology.
"The lower requirement for enterprises’ registered capital will definitely allow moreindividuals to launch their companies with less money through a more convenientprocedure," said Zheng Da, the owner of Yuyao Chezhiku automotive supplies in Zhejiangprovince
A micro-sized enterprise launched in 2011, Zheng’s factory has about 20 workers andmonthly sales revenue of more than 200,000 yuan.
Zheng added that more measures would hopefully be issued to help existing privateenterprises with tax deductions and lower labor costs. （Editor：LiXiang、Yao Chun）
|
