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|Wednesday, May 23, 2001, updated at 14:23(GMT+8)|
Light Greener for Zhongguancun to Channel in Venture CapitalAs long as there is foreign capital to enter, hi-tech enterprises registered in Zhongguancun Science Park will be allowed to open foreign exchange accounts in banks as joint ventures do. This is another preferential policy issued by State Administration of Foreign Exchange (SAFE) to help channel in venture capital (VC) in the Park.
According to common practice of the state, only Chinese and foreign equity joint ventures (defined as having at least 25 percent foreign capital) are entitled to open exchange accounts to enable foreign capital to exit smoothly after gaining profits. Now this cap has been lifted, but the policy is only limited to hi-tech firms registered in Zhongguancun Science Park.
The policy is designed to facilitate VC into Zhongguancun, an official says. For venture capitals are usually in small amounts taking only 5 to 10 percent shares, and foreign capitalists can not reap their profits without enterprises' exchange account. Now the investment channel has been opened completely.
To open exchange accounts, the said enterprises should first go to administration departments for a Foreign Exchange Registration, then make application with the Registration and other relevant materials, finally go to appointed banks to open accounts.
By PD Online staff member Li Heng
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