Foreign HR firms can control JVs in China

September 01, 2006 | BY

clpstaff

Foreign human resources firms such as Manpower are now allowed to control joint venture firms (JVs) with stakes of up to 70% if they agree to register…

Foreign human resources firms such as Manpower are now allowed to control joint venture firms (JVs) with stakes of up to 70% if they agree to register the companies in the Pudong district in Shanghai, following approval from the central government for the district to be used as a test area for the policy change.

In early 2004, the central government began offering business licences to foreign consulting firms, allowing them to invest in or establish JVs. Previously, foreign human-resources firms could only hold up to 49% stakes in their JVs in China.

The relaxed restrictions on foreign investment in the sector has been welcomed by the financial sector, as there is a fresh demand for expert staff and managers, which are needed to develop China's domestic banking institutions. Revenues from the human resources sector exceeded Rmb10 billion (US$1.25 billion) in 2005.

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