Company News

In order to promote the robust development of the country’s logistics industry, China’s State Council issued new guidelines (guobanfa [2011] No.38) on August 19 offering fiscal and administrative incentives to logistics enterprises.

On August 25, the northeast Chinese city of Dalian released a new policy set to come into effect from September 1, 2011, stating that the calculation for the employer contribution of social insurance costs on behalf of their employees will change. The effect of this change is going to have a considerable negative effect on some companies based in the city.

China has released new regulations to formalize its security check system for inward merger and acquisition (M&A) transactions. The new law will make it relatively difficult for foreign investors to avoid security reviews, even though many investors tend to merge with or acquire Chinese companies through ways such as establishing variable interest entities or trust companies.

In addition to amendments to the social insurance system in Dalian (explained here yesterday), the northeast city has also implemented an amendment to the maternity benefit policy.

From July 2011, foreign invested enterprises (FIEs) in the pilot areas of Beijing (Dongcheng, Xicheng, Chaoyang, Mentoutou and Shunyi District) will be required to pay labor union fees, according to a recent announcement made by the Beijing Labor Union.

If a foreign accounting firm in China does not extend its representative office (RO) registration when it expires, the registration may face automatic cancellation by the Chinese authorities. Accordingly, a recent circular by the Ministry of Finance has just announced the cancellation of five foreign accounting companies’ RO registrations in China.