New rules for the acquisition of domestic firms by foreign investors have recently been issued, and constitute one of the most important legislative developments affecting foreign parties in China this year.
Joint venture trading companies are now allowed on a wider scale. Trading companies can now be set up anywhere in China, the start up requirements are less restrictive, and the scope of business is wider.
Foreign enterprises in the PRC are required to pay value-added tax, business tax and enterprise income tax on the revenue from disposing Chinese financial assets.
The PRC's new Foreign Debt Administration Tentative Procedures set out tighter foreign debt registration requirements, while collecting and putting a high-level government imprimatur on various policies and practices.
New rules make for a limited opening of the futures trading sector, and might constitute a new beginning for China's futures markets, though further legislation is needed to clarify the opportunities for foreign investors.
On December 6 2002 the Guangdong Provincial People's Congress passed the Guangdong Province, Electronic Transactions Regulations (the Regulations). These are the first regulations in China to address the particulars of electronic transactions.