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Strong investment inflow expected from China

On the eve of China’s 60th anniversary celebration, additional avenues had been opened for foreign investment in Chinese companies.New opportunities for Chinese investments had been created during a conference organised by CzechInvest and the General Consulate of the Czech Republic. The legal and tax conditions for business in the Czech Republic were presented to Chinese investors by the international law firm Kinstellar.

The conference held recently in Shanghai was attended by approximately 80 representatives from Chinese companies active in the fields of aviation, energetics, IT, renewable energy, the machine-building industry or environmental services.

Chinese firms showed a strong interest in connection with the change in the legislation regulating Chinese investments abroad – from this point on, they will be able to invest more substantially in the Czech Republic. Kamil Blažek, a partner at Kinstellar, says, “The main obstacle to the development of Chinese investments in our country was eliminated on the Chinese side, specifically in the Chinese general investment rules”. Blažek adds, “Decisions on potential investments are no longer subject to approval by the Chinese government and China’s central authorities but will now be made at a regional level“.

In his view, the Czech Republic can expect Chinese investors to be very active in the upcoming months. “The regulation was liberalised in phases, at first with the Chinese Ministry of Trade’s binding rules on foreign investments effective from 1 May 2009. These rules form part of a “go-out” policy designed by the Chinese government in support of Chinese investments abroad,” says Kamil Blažek. “On 18 May 2009, the Chinese Foreign Exchange Administration submitted a draft directive providing for the mode of the Chinese government’s control over foreign investments. The new, looser regulation became effective on 1 August 2009. I expect these rules to move towards further promotion of foreign investments,“ he adds.

The international law firm Kinstellar prepared a presentation on the legal and tax conditions for Chinese investors in the Czech Republic and the CEE region. The main topics covered included the protection of investments and double taxation in the Czech Republic, investment options and incentives, including specific investment opportunities in the Czech Republic and the entire CEE region. Kamil Blažek adds, “In 1991, a bilateral investment treaty was concluded between the Czech Republic and China and a new double taxation treaty was signed by both the parties in August this year“. Furthermore, the Chinese investors in the Czech Republic can take advantage of the extensive investment incentives programme for the manufacturing industry or other forms of assistance for supporting the services sector.

www.kinstellar.com