A Western Company Investing In a Manufacturing Business in China:
Capital Investment, Registered Capital, Capital Equipment, Financing And Insurance
One of the tools the Chinese government uses to assess business transactions involving US investment in China is Direct Foreign Investment, or DFI.
Part of the official regulated process of establishing a WOFE is the declaration of the Registered Capital that is being invested in the enterprise. Registered Capital can be a combination of actual cash deposited in a Chinese bank and Capital Equipment purchased or imported for use by the business.
There is significant regulation of Capital Equipment in China, how it is imported or procured, how it is used, and how it is held. Your banker may not be comfortable with evaluating the risk to these investments, and consequently may have a difficult time establishing the financial vehicles and setting interest rates you need to achieve your goals. Chinafacturing Solutions (CFS) has developed a relationship with a financial institution that you and your Banker can use to quantify, assess and reduce your risk. If you choose, CFS also has access to bankers interested in working with you to meet your financing needs in China.
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