Legal & Taxation Working Group meeting in Guangzhou
We are pleased to invite you to the next Legal & Taxation Working Group meeting. In this meeting the group will discuss the Bankruptcy Law and its implementation. The meeting will be held on Tuesday, the 13th of November at 4:00pm in Guangzhou.
The meeting will take place at the Deloitte office in Guangzhou (23/F Jianlibao Tower, 410 Dongfeng Road Central).
We thank Deloitte Guangzhou for their support.
In the Legal & Taxation WG the participants are experts on the field of laws and regulations. The working group will meet regularly and discuss new laws and issues the European Companies face in China.
Agenda:
3:30 - 4:00pm: Registration
4:00 - 5:30pm: discuss the Bankruptcy Law and its implementation
This WG focuses exclusively on experts on this field. We want to provide you a platform, where you can exchange your experience and talk about your concerns.
In order to clarify, please confirm your availability with an email to trossignol@euccc.com.cn.
Best regards,
Timothee ROSSIGNOL
Business Manager
trossignol@euccc.com.cn
020 8758 0479
Event review
Legal & Taxation Working Group Minutes
Date: 13th November, 2007
Venue: Deloitte office
Author: Timothee Rossignol
Agenda
1. Welcome
2. Chairman election announcement
3. Roundtable discussion about Bankruptcy Law and its implementation
Discussion Points
1. Welcome
Timothee Rossignol welcomed all participants and introduced Catherine Wang (MM) and himself to the Working Group.
2. Chairman Election
Francine introduced the possibility to run for a chairman. The Chairman election will take place during the next meetings, on the 8th of January 2008.
3. Roundtable discussion about Bankruptcy Law and its implementation
In the beginning of the meeting, Deloitte made a small introduction of the law with the new change compare to the previous law.
The objectives of the law is to uniform the bankruptcy regime for PRC enterprises including foreign-owned and domestic-owned, state-owned and privately-owned in Mainland China.
・The new Enterprise Bankruptcy Law of the PRC adopted on 27 August 2006, became effective on 1 June 2007. It replaces the PRC State Enterprise Bankruptcy Law (Trial Implementation) and offers a unified bankruptcy regime for both state-owned and privately-owned companies, including foreign investment enterprises.
・The New Law, which is more comprehensive and detailed than the Old Law, contains concepts similar to the bankruptcy regimes of many developed countries and brings China's bankruptcy law closer to that of other market economies.
・Deloitte conducted a survey jointly with CPA Australia Hong Kong China Division to assess the impact that a comprehensive bankruptcy law in Mainland China might have on the surveyed companies' approach to investing and doing business in Mainland China.
・The survey revealed that nearly three-quarters of the respondents expect to increase their investments in Mainland China over the next three years with the introduction of a comprehensive bankruptcy law. Over two-third of the respondents feel that a formal debt restructuring system would protect the interests of a bankrupt company while more than half of the respondents believe that it would protect the interests of creditors. Overall, the Survey results show that investors are positive about the New Law.
・The survey also revealed that a majority of the respondents think that it would be better to appoint a completely independent party as an administrator to protect their companies. According to the new law, liquidating group formed by the members from related sectors or organizations, or the social intermediary institutions such as law firms, accounting firms and insolvency liquidating firms may act as the Administrator. The administrator is designated by the People's Court.
・In preparing for the implementation of the New Law, the People's Courts in Mainland China have announced for registration of bankruptcy administrators (some at provincial level and some at municipal level). In some locations, approved lists of bankruptcy administrators were announced while in others they are under screening process. In Guangdong, the registration has been delegated to the Intermediate Courts of individual cities. Application for registration in Guangzhou was closed by 19 October and screening is undergoing.
・It is generally believed that it will take some time after the New Law is applied in more bankruptcy cases before we can see how the New Law is to be implemented and in the meantime many foreign investors/creditors may still prefer out-of-the-court measures in securing an exit. In any event, the New Law represents a positive development towards a more modernized and transparent insolvency practice, and, in particular in case of insolvent, provides better protection to creditors.