This October the Boshi Mutual Fund will be transferred from Beijing to Shenzhen. And it's not the only fund firm that has decided to move. Other firms have already moved to Shanghai and Shenzhen or have plans to move. So what is attracting them to southern China?
"China's two stock exchanges are in Shanghai and Shenzhen, which offer better investment environments for investers. Apart from this, a vast pool of professional experts in the two cities are bringing faster and better information resources to the fund firms.
But perhaps most importantly, the municipal governments of Shanghai and Shenzhen have implemented preferential tax policies and it would appear that this is the main motivation behind the moves."
Lou Jing explains that a Shanghai Pudong or Shenzhen registered mutual fund firm pays 15 percent income tax, but if based in Beijing they would have to pay 33 percent in income tax. A regular mutual fund firm usually registers five billion yuan or 580 million US dollars and can save a huge amount of money by moving from Beijing to Shanghai or Shenzhen.
Lou adds that lower property rental overheads down South are making the two locations even more attractive.
(China Radio International 08/03/2001)
