Hong Kong SMEs To Benefit From Relaxing Of Chinese Market Entry Rules

by Mary Swire, for LawAndTax-News.com, Hong Kong

07 May 2004

Less stringent entry rules for Hong Kong firms looking to move into the Chinese market are set to take effect in June, it emerged recently.

Speaking to the South China Morning Post this week, PricewaterhouseCoopers partner, Carrie Yu suggested that the removal of the majority of the investment entry requirements for Hong Kong businesses would likely benefit small and medium-sized enterprises (SMEs) the most.

Under the new rules, companies will no longer be required to have a minimum average annual sales record, except in specific industries, such as the motor trade.

In addition, the minimum capital requirement for wholesalers has been reduced from 80 million yuan to 500,000 yuan, and for retailers from 50 million yuan to 300,000 yuan.

There has been a great deal of interest in the new opportunities presented by the rule change, according to Ms Yu, who announced that:

"We have received a lot of customer enquiries about entering the China market after the rule change next month."

Businesses in Hong Kong have been urged to take advantage of the offer quickly, however, as the entry regulation changes will apply to all foreign investors from December 11.

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