Anti-Pyramid Scheme Campaign, Long and Unusual Company Names Banned – China Regulatory Brief

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China initiates a three-month campaign to combat pyramid schemes

The government launched a three-month campaign against pyramid selling after the death of a Chinese university graduate in Tianjin caused by involvement in a pyramid scheme.

China’s State Administration of Industry and Commerce (SAIC), along with the Ministry of Public Security and the Ministry of Education will work together to investigate recruitment methods multi-level marketing firms use to target graduates and new job seekers. Violating networks and entities engaged in such activities will be disbanded and charged.

Pyramid selling schemes have increased over the last few years mainly through social networks, with over 20,000 cases investigated by the Chinese police over the 10 year period from 2005 to 2015. The authorities seized RMB 990 million (US$148 million) over the course of the inquiry. In 2016, 2,826 cases were investigated, an increase of 19.1 percent from the previous year.

China bans unusual and long company names

The SAIC has released guidelines outlining restrictions for company names. The rules aim to reign in names of a discriminatory nature, those that exceed specified lengths, or those that are deemed too bizarre. Additionally, the guidelines prohibit copies and names too similar to those of competitors.

Discriminatory language referring to gender, race, religion, or language associated with politically sensitive topics such as national law, terrorism, the People’s Liberation Army, cults, as well as superfluous terms such as ‘the best’, ‘number one’, or ‘national’ are now strictly prohibited from registration. The regulation also gives the government powers to fix inappropriate company names.

The rules came in response to discovery of company names that were composed of complete sentences or narratives, with some reaching lengths of almost 40 individual characters.

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Registration and banking service for Hong Kong companies investing in Guangdong

The Guangdong Province Administration for Industry and Commerce, the Bank of China (Hong Kong), and the Guangdong Branch of the Bank of China, have launched a new Commercial Registration Bank-Government Express Service (CRBGES), a one-stop business registration and banking service aimed at Hong Kong investors looking to establish businesses in Guangdong.

Intending to simplify business establishment procedures around the Pearl River Delta area, the Bank of China will handle corporate establishment registration and opening of bank accounts for Hong Kong investors. Hong Kong investors will also be able to obtain an electronic business license with financial functions free of charge.

The service will be first piloted in the cities of Dongguan, Foshan, Huizhou, Jiangmen, Shantou, and Zhongshan.


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