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Horgos Business Setup: Stricter Regulation on Film Industry

Updated:2018-10-16 14:43:46    Source:www.tannet-group.comViews:551

Horgos business setup is a preferred choice for film and television industry due to the preferential tax relief policy. According to the regulations, between 2010 and 2020, the new registered company in Horgos will be exempt from corporate income tax within five years. However, this small northwestern city will no longer be a tax haven for companies that take advantage of the city's preferential policies on tax exemption, as the city has been tightening up requirements for businesses that are eligible for the policies.

According to statistics from the government of Ili Kazakh Autonomous Prefecture, the number of newly registered companies in Horgos shot up to 8,500 during the period from January to September of 2017 owing to the tax preferential policies. However, 98 percent are just registered locally without actual operations, mostly light-asset companies such as advertising, film and TV, media, equity investment, and electronics technology firms.

Loose regulations and supervision, low registration threshold and high tax breaks resulted in a surge in shell companies. According to media reports, many actors and actresses set up workshops in Horgos to handle financial work only.

Stricter Regulations on Film Industry
In January this year, Horgos adjusted its tax policies. Locally registered companies are required to have office space, pay social insurance for workers, and earmark 20 percent of tax deductions for local investment, pressuring shell companies to take actions.

The Horgos government now requires companies that wish to enjoy the policies to have a certain size of office space and number of staff members. It also blocks companies from sharing one registration address and those that have no intention of investing in the city.

Data shows at least 102 film and TV firms registered in Horgos have applied for deregistration sine June 2018.

Greater Pressure on Film Stocks
Statistics show that 23 out of the 24 listed film companies all have seen a drop in share price year to date with the biggest fall hitting 76.66 percent. Stocks of seven firms dropped over 40 percent.

The market confidence was discouraged by the outflow of capital. Stricter regulations may disrupt or stall some projects of small- and medium-sized companies in the short term, speeding up the industry reshuffle. In the long run, as the demand for films and TV series remains vibrant, regulated management will help aggregate resources and improve efficiency.  

In view of this, if your business presence are impacted due to the new regulations and has to be closed, Tannet can help you take care of the whole deregistration process. Our professional advisory team is familiar with every sector of company cancellation, we can assist enterprise in completing the procedure of dissolution successfully and free client from worry of disturbance.

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If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

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