Temporarily Restriction for Setting up Financial and Investment Companies
On 9th Jan 2016, Beijing Government issued the local regulation as “Regarding to Suspend the Registration for Companies in the Investment Industry within the City”. Dongjin learnt not only in Beijing, other cities in China have the similar regulations to suspend such registrations.
However, as we understand, in Shanghai, such registration is not fully suspended but the local officer will have a stricter requirement before they accept such cases. We list some information as follows.
1. In Shanghai Free Trade Zone
l There are the restrictions on the company registration (or even for the stage as name approval) if it is involves in “investment management”, “asset management” and “financial leasing”. If the company wants to set up the company with the above business scope, the investor should have a meeting with the local officer and the registered address should be the real office. If the investor is the individual, all investors should attend the meeting and if the investor is a company, its legal representative should attend the meeting.
l Till 21st Jan 2016, the business scope as”investment consulting” can still be registered.
l The registration for business scope as “financial information service” and “internet financial information service” have been suspended.
2. In other district in Shanghai
The registration for business scope as “internet + financial” has been suspended;
In the suburb districts in Shanghai (e.g. Fengxian, Baoshan, Yangpu, Chongmin, Jiading), the investment management, the investment consulting can be still registered and not require the meeting with the officer. Even in Fengxian district, the financial information service and asset management can be still registered.
3. In other cities in China
We learnt from our partners in other cities, such as “Beijing”, “Wuxi”, “Shenzhen” and “Chengdu”, the local government fully suspended the registration the companies in the investment industry.
Dongjin Comments: We understand that these restrictions are mainly due to the private illegal fund raising via these company vehicles and cause the troubles on the financial situation in China and even make it out of government’s control. As a result, the government can only use the “SUSPEND” action as their fastest way to control the current situation. But please understand that the above measure lacks of the legal basis, it is the temporary measure. After the government can clear the companies which involve in the illegal fund raising and have a good control on the market,it will re-open to the investors.
If you have any questions, please send the email to me.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021