Legislation roundup: Insurance companies' M&A, accounting firms in the FTZ and cultural service export tax

M&A

China Insurance Regulatory Commission, Measures for the Administration of the Acquisition and Merger of Insurance Companies
中国保险监督管理委员会保险公司收购合并管理办

Subject to the approval of the CIRC, an acquirer may, once it has completed the acquisition, control two insurance companies that engage in the same type of business. Also, with the approval of the CIRC, an investor involved in insurance company acquisition and merger activities may adopt means such as acquisition loans to finance the same provided that the size thereof does not exceed 50% of the total monetary consideration. Except in special circumstances such as risk disposal or a transfer between different entities controlled by the same controller, an acquirer is required to undertake in writing not to transfer, for three years from the date of completion of the acquisition, equity or shares of an insurance company that it has acquired.

Further reading:
PRC Insurance Law
Measures for the Administration of the Equity of Insurance Companies


Free trade zone

Ministry of Finance, Circular on Supporting the Establishment of Branches in the China (Shanghai) Pilot Free Trade Zone by Accounting Firms and Starting out the Work Associated with the Pilot Project
财政部关于支持会计师事务所在中国（上海）自由贸易试验区设立分所并开展试点工作的通知

The Circular supports accounting firms organised in the form of partnerships and those that have completed transformation into limited liability partnerships for at least one year to submit applications to the Shanghai Municipal Finance Bureau to establish one branch office in the pilot free trade zone.

Further reading:
General Plan for the China (Shanghai) Pilot Free Trade Zone
Shanghai Municipality, Special Administrative Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (Negative List)
A window into the future


Outbound investment

State Council, Opinions on Accelerating the Development of Foreign Cultural Trade
国务院关于加快发展对外文化贸易的意见

Cultural service exports strongly encouraged by the state are exempt from business tax, and cultural service exports that are included in the scope of levy of value-added tax will be subject to a 0% value-added tax rate or exempted from tax. Qualified cultural enterprises that engage in service outsourcing business may be eligible to pay enterprise income tax at the reduced rate of 15%.

Further reading:
Going outbound: What private companies can learn from SOEs
Measures for the Administration of Outbound Investment