China New Rules for Foreign Investors set-up Senior Care Institutions

Jun. 19 – If you are going to invested in China aged care industry, there is a new rule for you follow, especially, some of Dutch companies or institutions interested in invested in China aged care industry, indeed there are many chances in China old aged care sector at this moment, China is getting older.

Old age care in China is indeed a great concern for the Chinese government and Chinese senior citizen as well. China elderly services, the supply of aged care institutions and nursing staff is far from meeting the market demand. There is now a great chance for foreign investors to set up senior care institutions in mainland China.

2013 one of the Netherlands economic missions to China organized for Dutch companies active in the aged care sector has been witnessed the situation of old aged care in China: Nanjing, Suzhou and Shanghai, the Dutch Elderly Care Model, which is presented by the Netherlands delegation has received much attention in China. There are serious, promising projects going on regarding senior care institutions and old aged services between the two countries.

Caring for the elderly group has already become a pressing issue for China. In 2012, there were about 3.9 million beds in senior care institutions across China, while at the same time, the number of citizens aged over 60 in the country reached 194 million. This figure is expected to reach 221 million by 2015. In China well-trained professional home care nurses very hard to find because of the lack of professional training institutes.

In terms of the residence for the elderly people, aged care service consists of home-based care and institution-based care. The former has long been the major model of aged care service in China. As of the end of 2010, China had a total of 39,904 aged care institutions with 3.149 million beds, accommodating 2.426 million seniors who only accounted for about 0.6% of the population aged over 60 in China.

As the aged care industry emerges in China recently, the government supports and encourages its development in policy. China’s Ministry of Civil Affairs issued a circular to invite public opinions on the “Approving Measures for the Establishment of Senior Care Institutions” and the “Administrative Measures for Senior Care Institutions” on June 3. The two draft rules clarify the establishment conditions for the senior care institutions and explicitly allow foreign investors to set up such institutions in Mainland China. China specific new rules are below:

Establishment Requirements. A senior care institution established in Mainland China shall meet the following requirements:

  •  The establishing entity shall either be an existing lawfully established organization or an individual with full capacity for civil conduct
  •  It shall have its own name, domicile, articles of association and management system
  •  It shall have more than 10 beds
  •  It shall have qualified administrative staff, professionals and service staff to render services
  •  It shall have basic living rooms, facilities, equipment and activity space that meet the specifications and technical standards relating to senior care institutions
  •  It shall have the funds that match its service contents and scale
  •  It shall meet other conditions stipulated by relevant laws and regulations

Senior Care Institutions Established by Foreign Investors. Moreover, the draft rules allow foreign investors to set up senior care institutions in Mainland China in the following ways:

  •  Senior care institutions solely invested by foreign organizations or individuals
  •  Senior care institutions jointly established by foreign organizations or individuals with Chinese organizations or individuals in the form of an equity joint venture or a cooperative joint venture
  •  Senior care institutions solely invested by overseas Chinese, or organizations or individuals from the regions of Hong Kong, Macau or Taiwan
  •  Senior care institutions jointly established by overseas Chinese, or organizations or individuals from the regions of Hong Kong, Macau or Taiwan with Chinese organizations or individuals in the form of an equity joint venture or a cooperative joint venture

The establishment of the senior care institutions by the above-mentioned organizations or individuals shall be approved by the local civil affairs authorities of the provincial people’s governments or the civil affairs authorities of the municipal people’s governments designated by their provincial-level counterparts. The draft rules also stipulate that elderly services provided by senior care institutions should include daily care, rehabilitation care, spiritual comfort service, and cultural entertainment. Moreover, senior care institutions that discriminate against, insult, mistreat or abandon the elderly could face fines up to RMB30,000, and will be held accountable for any actions that violate the law.

Although aged care is a low-profit industry, the aged care real estate industry is expected to make a reasonable profit. Driven by the huge market demand and the national incentive policies, social capital has flown into the aged care real estate industry. For instance, such projects as Shanghai Cherish-Yearn and Xiyanghong Chain Senior Apartment developed by private enterprises have been put into operation. Real estate companies including Vanke, Poly Real Estate and R & F Properties, insurance firms like Taikang Life and China Life Insurance, diversified enterprises such as Harbin Institute of Technology Group Inc., Fosun Group and Legend Holdings and foreign-funded corporations like Fortress Investment and Emeritus Corp. have also set foot in the aged care real estate market. For the “List of Old Aged Care Investment Projects in Chengdu China” available upon request, contact DCCC or mail to: info@dccchina.org