Draft points to 51% foreign ownership of insurance firms
Proposed amendment to regulations deletes minimum requirement for registered capital or working capital and simplifies procedures
Foreign investors involved in joint venture life insurance companies in China will be expected to hold no more than 51% of the equity stake, according to the latest draft amendment of regulations, The Paper reported.
Currently, the ceiling ratio of foreign capital inside a life insurance firm founded by domestic and foreign investors is 50%. Changing the figure to 51% points to the possibility of foreign ownership, and that foreign investors could operate in line with their business philosophy.
The draft amendment has also deleted the minimum requirement for registered capital or working capital of foreign-funded insurance companies, relaxing the restrictions and simplifying the procedures of the establishment of branches.
This is part of the Chinese government’s effort to promote the further opening up of the financial sector.
The upper limit of foreign holdings does not only cover life insurance firms, but also securities, fund management and futures companies, which are expected to relax to 51% this year, according to what Yi Gang, director of People’s Bank of China, promised during the Boao Forum in April.