China is making big moves to make it easier to invest in start-ups

Alibaba’s founder Jack Ma. Image: ChinaFotoPress / Getty Images.

China’s government is ramping up its efforts to boost funding for start-up firms.

According to Reuters Chinese premier Li Keqiang, addressing China’s state council on Thursday, announced measures to promote the domestic listing of Chinese start-up firms by introducing special ownership structures to encourage greater innovation in the sector.

Li also urged local governments to give tax incentives to start-up firms who back innovation, according to the central government website.

With foreign ownership in China’s internet sector currently blocked, many well-known Chinese technology firms such as Alibaba and Baidu had to adopt variable interest entity structures that allowed them to tap foreign equity without breaking Chinese law.

The changes announced by the Chinese government yesterday will make it easier for start-up firms to obtain capital from domestic, rather than offshore, sources.

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