MOFTEC Delivers: Foreign Majority Ownership Permitted in International Freight Forwarding Companies
January 31, 2003 | BY
clpstaff &clp articlesUnder new MOFTEC rules, foreign operators can now hold up to 75% ownership in international freight forwarding agency companies in China. The key question for such foreign operators is: how to best structure their operations so as to be in a position to take full advantage when wholly foreign-owned enterprises become available in less than three years' time?
Share:
On December 11 2002 the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) issued the Administration of Foreign-invested International Freight Forwarding Agencies Provisions (the New Provisions). The New Provisions became effective on January 10 2003, and replace the short-lived Order No. 31 - Administration of Foreign-invested International Freight Forwarding Agencies Provisions (the 2001 Freight Forwarding Provisions), which were issued by MOFTEC and effective from January 1 2002.
Under the New Provisions, foreign investors can now apply to establish a 75% stake in a new international freight-forwarding joint venture. This is an increase from the 49% stake that foreign investors were previously allowed in such international freight forwarding joint ventures. In addition, the New Provisions also expressly provide that foreign parties in existing international freight-forwarding joint ventures can now apply to increase their stake to 75%.