China Updates- Capital Contributions

Capital Contributions

MOFCOM has removed inconsistencies arising from previous reform of the rules on the registered capital of corporations in China. (See our earlier Primasia newsletter on this subject where the inconsistencies and uncertainties were highlighted.) In essence, it was uncertain whether the reforms, which appeared to be intended to be applied universally within China, were in fact applicable to Foreign Invested Enterprises.

Now MOFCOM has clarified that.

1. The minimum registered capital requirements on (most) FIEs have been removed, and,
2. Full contribution of registered capital to an FIE is no longer required for its shareholders to invest their equity interests in the FIE into another FIE.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Need more information?

Please contact:

John Barclay -Email

Teresa Tam - Email 

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Follow us on:

Website: Primasia HK / Primasia China

LinkedIn: Primasia

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Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Hong Kong Updates- Privity of Contract & Anti-trust

Privity of Contract

The Contracts (Rights of Third Parties) Ordinance comes into force on 1^stJanuary 2016. We will report on this in more detail in our January newsletter but, in summary, the new Ordinance reforms the privity of contract rule that only a party to a contract may enforce it.

Anti-trust
The Competition Ordinance entered into force on 14^th, December 2015.

This new legislation makes unlawful arrangements with competitors which could lead to price fixing, including fixing of wages, or other anti-competitive practices such as boycotting of competitors. A significant aspect of the legislation is its application to employment, rather than just to market fixing on the supply side.

Under the Ordinance, there are two key prohibitions, taking the form of "Conduct Rules".

The "First Conduct Rule" prohibits agreements and concerted practices (i.e. cabal-type behaviour) that restrict competition. 

The "Second Conduct Rule" prohibits a business with significant market power from abusing that power through behaviour that restricts competition.

A Commission will oversee the interpretation and application of the Conduct Rules. 

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

===================================================================

Need more information?

Please contact:

John Barclay -Email

Teresa Tam - Email 

--------------------------

Follow us on:

Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong