Rules To Be Relaxed For Chinese Firms Investing In Hong Kong
by Mary Swire, Tax-News.com, Hong Kong
21 September 2004

According to reports in the Chinese media, rules governing how mainland enterprises can invest in the special administrative regions of Hong Kong and Macao are due to be relaxed.

Quoting a government source, China Daily reported that a new policy has been formulated setting out a clear service pledge on handling applications from mainland investors, in order to facilitate approval procedures.

The new arrangement will reportedly make the application procedure more transparent and hand over most approval duties to provincial authorities.

Firms going to Hong Kong and Macao can choose to invest through setting up wholly owned or jointly owned businesses, mergers, acquisitions or capital injection under the relaxed rules, the source stated.

However, enterprises planning to be listed overseas indirectly, and investment holding companies, will still require approval from the Ministry of Commerce.

The official also revealed that under the new regime, the applicant no longer needs to submit project proposal and feasibility study documents.

Previously, all applications for investing in Hong Kong and Macao needed to be scrutinized by the Hong Kong and Macao Affairs Office of the State Council.

The new rules are being implemented as part of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong/Macao and China.

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