Establishment and acquisition of commercial factoring enterprises

Factoring is a comprehensive credit service based on the accounts receivable of an enterprise that arise in connection with the goods sale or service contracts that it enters into in the course of transactions, where a commercial bank or commercial factoring enterprise provides trade financing, accounts receivable management, accounts collection, security for bad debts, etc.

Clarification of policies

On 27 June 2012, the Ministry of Commerce (MOFCOM) issued the Notice on Work Relevant to the Commercial Factoring Pilot Project. In October of the same year, MOFCOM issued the Reply of the Ministry of Commerce on the Implementing Plan for the Commercial Factoring Pilot Project, consenting to the launching of a commercial factoring pilot project and the establishment of commercial factoring companies in the Tianjin Binhai New Area and Shanghai Pudong New Area.

In December of the same year, MOFCOM further issued the Notice of the Ministry of Commerce on the Establishment by Hong Kong and Macau Service Providers of Commercial Factoring Enterprises in Shenzhen and Guangzhou on a Pilot Basis, opening Guangzhou and Shenzhen as pilot regions for foreign-invested commercial factoring, and permitting Hong Kong and Macau service providers to establish commercial factoring enterprises in the form of Sino-foreign equity joint ventures, Sino-foreign co-operative joint ventures, or wholly foreign-owned enterprises.