China will boost its economy and the emergence of new entrepreneurs, especially in the SME sector by relaxing the requirements that the country now has to register a new business, company, said the Chinese premier, Li Keqiang, quoted by the media Chinese.
According to a statement issued by the Chinese State Council, Li said these new measures "will help expand private investment, strengthening the foundations for economic recovery and create more job opportunities."
The new measures include the elimination of the minimum capital required to set up enterprises: in the case of a limited liability company (LLC): 30,000 yuan ($ 4,900), to form a single company 100,000 yuan ($ 16,433) and 5000000 yuan (US $ 822,102) for an incorporated company.
Also there will be no limitations on duration for the contributed capital, which in turn will no longer be a requirement for the registration of a company- so the duration and amount of capital to be invested will be decided by the founders of companies.
"By expanding market access and establishing a system of modern, efficient and transparent business registration, we streamline government administration, create fair competition and support small businesses, especially innovators," said Wen in statement, quoted today "China Daily".
It was also reported that the annual inspection companies will be replaced by an online information system in which they will have to make public their business operations and increase the transparency of their negotiations.
Other requirements such as business location will also be simplified, while firms who commit deceptive or aberrant practices be made public.
The measures will promote a fair and competitive business environment, said the Chinese State Council said in the statement, adding that it will also mobilize social capital and are in line with market expectations of social investment to expand and strengthen the economy
"The minimum requirement of registered capital was created to protect creditors, but because in many cases (employers) offered it served a minimal role," said the expert private economy of the Academy of Social Sciences of China, Ju Jinwen, according to "China Daily".
He also noted that the elimination of this minimum capital investment lowers the threshold for betting instead on monitoring intermediate level (with the public online system).
"The ultimate goal is to promote entrepreneurship among private investors," he said Ju.
Other experts added that the measures will drive more people with less money to launch their own companies, through a more convenient and fair procedure.
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| China City |
The new measures include the elimination of the minimum capital required to set up enterprises: in the case of a limited liability company (LLC): 30,000 yuan ($ 4,900), to form a single company 100,000 yuan ($ 16,433) and 5000000 yuan (US $ 822,102) for an incorporated company.
Also there will be no limitations on duration for the contributed capital, which in turn will no longer be a requirement for the registration of a company- so the duration and amount of capital to be invested will be decided by the founders of companies.
"By expanding market access and establishing a system of modern, efficient and transparent business registration, we streamline government administration, create fair competition and support small businesses, especially innovators," said Wen in statement, quoted today "China Daily".
It was also reported that the annual inspection companies will be replaced by an online information system in which they will have to make public their business operations and increase the transparency of their negotiations.
Other requirements such as business location will also be simplified, while firms who commit deceptive or aberrant practices be made public.
The measures will promote a fair and competitive business environment, said the Chinese State Council said in the statement, adding that it will also mobilize social capital and are in line with market expectations of social investment to expand and strengthen the economy
"The minimum requirement of registered capital was created to protect creditors, but because in many cases (employers) offered it served a minimal role," said the expert private economy of the Academy of Social Sciences of China, Ju Jinwen, according to "China Daily".
He also noted that the elimination of this minimum capital investment lowers the threshold for betting instead on monitoring intermediate level (with the public online system).
"The ultimate goal is to promote entrepreneurship among private investors," he said Ju.
Other experts added that the measures will drive more people with less money to launch their own companies, through a more convenient and fair procedure.
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