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Measures for Administration of Finance Companies of Enterprise Groups (the Measures)

中人民共和国外金融机构管理华资法办

Issued: July 27, 2004

Effective: September 1, 2004

Issuing Authority: The China Bank Supervisory Commission (CBSC)

The Measures lower the threshold for the total assets value and total turnover of the member units for the companies that are established to provide financial management services to the member units of enterprise groups legally registered in the PRC as a sole proprietorship, and allow external qualified institutional investors to hold stock in the finance companies. 

For investment companies, requirements include net assets of not less than 2 billion yuan for the year prior to the application as well as pre-tax annual profits of no less than 200 million yuan for two years prior to the application. 

Under the Measures, the minimum registered capital for the establishment of a finance company is 100 million yuan. The registered capital of the finance companies to be set up by investment companies may either be solely contributed by the investment companies or jointly contributed by the investment companies and their investors. 

Finance companies that have been established for more than two years with a registered capital of 300 million yuan may be allowed to set up their representative offices and branches in the area where the member units are intensively located and a fairly large business volume exists. The working capital of a branch company shall be at least 50 million yuan; the total amount of working capital allocated by a finance company to all its branches shall not exceed half of its registered capital. Finance companies shall apply to the CBSC for the establishment of branch companies.