4,000 Bogus Joint Ventures Nabbed in S. China Province

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Last updated at: (Beijing Time) Saturday, March 22, 2003

4,000 Bogus Joint Ventures Nabbed in S. China Province

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A total of 4,000 companies have had their business licenses revoked by industrial and commercial authorities in Hainan, an island province in southern China, for illegally registering as joint ventures.

To attract overseas investment and simplify application procedures, local registration departments have a policy which requires no inspection of the funds of companies that apply for qualification as joint ventures.

As a result, a number of foreign companies make no investment at all after their bogus subsidiaries are registered and they acquire the tax preference granted by the local government.

The number of fundless joint ventures with no employees or fixed business premises has also risen fast in Hainan.

To improve its investment climate for overseas capital, the provincial government has decided to establish an annual check system to curb such illegalities.

Official statistics reveal that after the massive check, the number of joint ventures in Hainan has been slashed from 6,600 in 2000 to 2,251 now.

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