Companies spared cost of annual business review

PUBLISHED : Wednesday, 24 December, 2008, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

The central government has stepped up efforts to alleviate the plight of struggling firms by waiving the fee for an annual review of their business.

The State Administration for Industry and Commerce said yesterday cash-strapped companies would be allowed to skip the fee required for auditing their business and operations annually, a key part of corporate governance, Xinhua reported.

Market watchers welcomed the move, which is designed to lower companies' costs.

'It is a small incentive, which will help companies financially,' Federation of Hong Kong Industries deputy chairman Stanley Lau Chin-ho said. 'It shows the Industry and Commerce Bureau realises how severe the impact of the global financial crisis is on companies.'

The bureau is also facilitating the central government's efforts to spur domestic demand and investments by simplifying registration procedures for projects and new companies. It allows struggling firms to delay meeting their financial commitments to projects, within a certain time frame.

Meanwhile, the State Administration of Foreign Exchange has tightened the ratio of exporters' prepayments to the regulator for foreign exchange receivables in a move to better control and monitor funds flows.

The ratio was raised to 25 per cent from 10 per cent, meaning exporters must pay the regulator more upfront. The change, announced yesterday, took effect immediately.

The regulator exempts exports worth below US$30,000 from the rule. It said the change would allow it to better regulate companies' trade financing activities and monitor short-term foreign exchange liabilities, but some exporters complained it would tighten their cash flow.