From now to the end of this year, the State Securities Committee (SSC) will still continuously receive, consider and approve the listing applications of joint stock firms, but the opportunity for those firms to receive the corporate income tax priorities seems to have already gone.
The SSC said that after the Ministry of Finance has abolished the preferential corporate income tax policy for newly listed companies as of January 1, 2007, the number of listing applications of businesses have surged dramatically on the table of SSC.
Many shareholding companies are now making concerted efforts in completing the stages to soon list shares prior to January 1 next year to be entitled to CIT priorities according to the prevailing rules of the finance ministry on newly listed businesses.
However, according to the SSC, this opportunity seems to have gone already.
Currently, the state stock market regulator is still receiving listing applications of firms in compliance with the prevailing rules, but the time left is not long enough to satisfy all proper listing requirements .
In a notice released October 19, the SSC warned: “Some companies that have submitted the listing applications without any good preparation or submit the listing documents to the SSC from now to the end of 2006 will not be able to ensure the progress for considering and approving the stock listing before the preferential CIT policy cut takes effect on January 1, 2007”.
Thus, the door is being closed as the race to list stocks is in the hottest period. Currently, there are not less than ten listing application profiles that are waiting for the approval of the SSC, while the number of listing documents are still increasingly getting thicker.
However, in order to be able to go public on the country’s two stock transaction centres, it takes a company at least two months from the submission date of the listing applications in case those documents are sufficient and legal. It takes 45 at least days to consider and approve the listing documents according to the rules of the SSC, plus the time to complete all the procedures from the granting of a listing license to officially listing shares estimated at about 20–30 more days, while the time left in 2006 to receive CIT priorities is only under 70 days (calculated from today October 24).
Therefore, the SSC has requested securities companies to consult stock listing and transaction registration documents and firms that are preparing for share listing to make considerations on this short period drawing nearer.
Thus, the listing applications after October 31 this year, especially after November 15 are unlikely to help companies as applicants trade shares before January 1, 2007.