Correctly Assessing The Ratios of Total Investment (TI) and Registered Capital (RC) in Your China Business

by Alberto Vettoretti, South China Regional Partner, Dezan Shira & Associates

When it comes to establishing a foreign entity in China, investors need to be aware of the fact that the local currency (RMB) is not freely convertible and there are restrictions on the amount which can be received in China as part of the initial investment as registered capital. Remittances of foreign exchange is in fact restricted in China and if we take into consideration other limitations given by the local regulations we can see how investors need to put some thought into a proper budget for their start up operations until when the FIE has enough revenues to cover one off or recurrent costs.

Read full article [PDF]

This article included in China Briefing Magazine

September 2005: Cultural Differences When Managing Chinese Financial Reporting

Other articles in this issue: Cultural Differences In Understanding Chinese Financial Reporting & Common Accounting Practices in the PRC by Dezan Shira & Associates, Investment Intelligence Unit, Greater China New Treatment on Individual Income Tax for Employee Stock Options by Sabrina Zhang, North China Regional Partner, Dezan Shira & Associates Qualifying Bad Debt in your China Accounts by Dezan Shira & Associates, Investment Intelligence Unit, Greater China