WASHINGTON, Dec 8 (Reuters): The World Bank yesterday praised China for changes to its company law that sharply lower the minimum capital amount required to start a company.
The new law, effective Jan 1, 2006, will lower the minimum requirement to 30,000 yuan ($3,700) for limited liability companies in all industries.
Previously, entrepreneurs had to pay 500,000 yuan to open a manufacturing or wholesaling business.
The World Bank and its private sector arm, the International Finance Corp, said such reforms, while simple, could create new jobs.
"Improving regulations is vital for all entrepreneurs and key to creating more employment opportunities. Young people looking for their first jobs and unemployed people benefit the most from such reform," World Bank vice president Michael Klein said in a statement.
Prior to the changes, China had the eighth highest minimum capital requirement in the world. Only Ethiopia, Jordan, Madagascar, Saudi Arabia, Syria, the West Bank and Gaza and Yemen imposed higher start-up capital, the bank said.