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Incentives lure more PE firms to China's north-west
By Louise Ho |
March 30, 2012, Friday
|
Online Edition
Online Edition
MORE private equity companies are expected to move to China's north-western area as Tianjin has been tightening its rules on this sector since the second half of last year.
In August, Tianjin raised the registered capital for a private equity company from 10 million yuan (US$1.6 million) to not less than 200 million yuan. The municipality tightened rules after some illegal financing cases were noted in private equity.
Before Chinese New Year, Jinshang Huifu, a private equity fund registered in Tianjin, moved to Urumqi, the capital of Xinjiang, where the registered capital for a private equity company is 30 million yuan.
Besides a lower investment threshold, the north-western region has also introduced preferential policies to private equity firms, such as housing subsidies, medical insurance and an education fund for children of senior managers.
"Due to bigger competition in the eastern area, an expansion into the north-western region has become an important development strategy for private equity companies," an analysis by ChinaVenture showed. "In the future, more private equity funds will be positioned in the north-western region, which will ease the unbalanced development of the whole private equity industry," according to the analysis.
In August, Tianjin raised the registered capital for a private equity company from 10 million yuan (US$1.6 million) to not less than 200 million yuan. The municipality tightened rules after some illegal financing cases were noted in private equity.
Before Chinese New Year, Jinshang Huifu, a private equity fund registered in Tianjin, moved to Urumqi, the capital of Xinjiang, where the registered capital for a private equity company is 30 million yuan.
Besides a lower investment threshold, the north-western region has also introduced preferential policies to private equity firms, such as housing subsidies, medical insurance and an education fund for children of senior managers.
"Due to bigger competition in the eastern area, an expansion into the north-western region has become an important development strategy for private equity companies," an analysis by ChinaVenture showed. "In the future, more private equity funds will be positioned in the north-western region, which will ease the unbalanced development of the whole private equity industry," according to the analysis.
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