Government Reverse Mortgages for Seniors

Regierung Reverse Mortgages For Seniors

It represents a great opportunity for the reverse mortgage market. Now the Indian government is implementing innovative strategies for change. or HUD or FHA and have not been approved by HUD or any government agency. Doing so makes reverse mortgages a particularly attractive option for some older homeowners. Wonderful overview of why reverse mortgage might be the right purchase option for savvy older buyers!

public incentive for non-resident investment in

As a reaction to increasing urbanization and population change, the issue of appropriate elderly services represents a serious issue for this densely populated state. Over the past few years, the government of China has initiated a number of reform measures to counter the lack of health institutions. From 2013, the government of China has adopted a set of guidelines and ordinances to encourage investments by individuals and abroad in the industry.

In the latest notice of 24 November 2014, the Ministry of Commerce (MOFCOM) and the Ministry of Civil Affairs (MCA) issued together the "Circular on Various Issues of FDI in For-Profit Seniors Nursing Facilities" (Circular), which contains specific guidance on FDI in China's Seniors Nursing Sector.

It is however recommended that overseas health and finance investments perform adequate due diligence before hurrying to enter the markets. At first glance, the Chinese seniors nursing home is a huge and promising one. It should be noted, however, that culture influences the perception of the scale of the senior citizens nursing home markets in the state.

The majority of China's seniors, who are strongly affected by the contemporary concepts of child hoodwinking, choose to be looked after by their family at home, rather than living in separated elderly nursing homes. This has been taken into account by the government of China in its nursing plans for the elderly. Until 2015, 90 per cent of seniors are to be looked after at home, 7 per cent in the municipality and the other 3 per cent in outside establishments.

Regarding the assignment to outside agencies, the government gives preference to elderly people who are in serious economic, health or physically difficulties over those who have a solid budget but decide to remain in elderly nursing homes as a way of life for them. It is a competitive edge for overseas investment focused on the high-end seniors nursing home segment.

Premier markets offer great opportunities for international investment and a wide range of opportunities for further growth. In addition to the construction of high-quality housing and the provision of the necessary infrastructures, there is a serious lack of older carers in the sector and education is needed to enhance knowledge in this area.

Complementary value-added activities such as planning and building works, logistic chain, foodstuffs and caterers, refuse management and value-added activities such as psychosocial advice would also be needed to supplement China's elderly nursing institutions. In order to be able to take full benefit of the chances in the seniors' nursing home markets, it is essential that international investments first gain an insight into the seniors' nursing home field and the corresponding jurisdiction.

Nursing homes for the aged have long been underfinanced, but there is no lack of regulatory authorities. Nine ministries have put their name on it in a government communication on health services and nursing services for the aged recently published in September. More than 100 cutlets have been collected by overseas farmers before they can begin building their health clinics in China.

International investments in non-profit elderly services must be approved by MOFCOM, approved by MCA and registered with the State Administration of Industry and Commerce (SAIC). This circular stipulates that the alien investors must first obtain the authorisation of the province of MOFCOM at the location of the retirement home, followed by the incorporation of the enterprise with the regional office.

Once the commercial license has been granted by SAPIC, the overseas investment seniors must obtain a Seniors Service Establishment Permit (SCFE Permit) from MCA at the local or county levels. Prior to the granting of the SCFE approval, the nursing home for the elderly investing abroad may not start operations by levying charges or by accepting an elderly individual into its establishment.

In contrast to many other occidental jurisdiction, in China companies must specify the type of activity they are planning before starting out. It is the government's intention to issue a trade permit setting a de facto limit to the activity of the enterprise.

The conduct of transactions beyond this framework will be investigated and punished. In recent years, during the housing bubble, many individuals and international companies have turned to elderly support to help build housing portfolios. In order to make sure that the authorised investments in elderly people' s welfare are limited to the purposes for which they are made, the Circular expressly imposes limits by forbidding the municipal government from authorising any future changes in the use of the site or in the proportion of area.

Some large state-owned Chinese underwriters recently tested reverse mortgages on a trial run base. Seniors can thus resell their belongings to insurances or bankers and pay the cost of life in installments. It should be noted, however, that nursing homes for the elderly investing abroad may not conduct such reverse mortgages in China.

Additionally to the above-mentioned SCFE approval, further approvals from the competent government agencies would be necessary if the overseas seniors' home invests in providing other value-added health and/or food related activities as part of its health maintenance service. International investment is permitted to set up retirement homes or collaborate with local China partner institutions.

A further option is the acquisition of already established profit-oriented institutions. One hundred per cent ownership provides better oversight and integration, but allows the offshore investment firm to address many interest groups directly, which is sometimes not desirable. In contrast, a JV with a high-quality China affiliate can deliver invaluable assets, encompassing country, licensing, employment and government relationships, but overseas investments must be able to benefit from sharing good practices and doing business with their China affiliates.

China has a right of veto over certain important commercial transactions. Once the overseas investment seniors nursing company has been founded, the circular allows the overseas investment company to make other investment related to seniors nursing in China. The health sector reforms will encourage overseas investment to increase investment in elderly healthcare, franchise development, and high value branding in China.

China's government also urges overseas investment to engage in seniors' nursing operations through cooperation, operations, equity ownership, leasing and public-private partnerships (PPPs). Nevertheless, the government authorities in China still have difficulties in implementing and regulating privatisation partnerships. Prudence and innovativeness are needed to examine the senior citizens nursing sector privatisation scheme approach.

Recently, China agreed to give the markets a crucial part in resource allocation. Before this is done, however, the government will continue to have an important influence at various different level in the field of geriatric nursing. Government regulations have certain benefits. According to the Circular, foreign-invested retirement homes receive the same privileged status as resident residential retirement homes, which includes tax exemptions or reductions and administration fees.

Recently, the Ministry of Finance and the National Development and Reform Commission published a common announcement (Cai Shui 2014 No. 77) outlining how older nursing institutions can benefit from the reduced administration tolls. It is still not clear what the fiscal advantages are for non-resident taxpayers. Recently, the government of China started a publicity drive to examine the fiscal advantages given by municipal authorities at their discretion, in particular those that have been given without explicit legal approval or by the State Council.

It is expected, however, that fiscal advantages granted to overseas reinvested elderly nursing institutions will have either an explicit statutory base or confirmation in writing from the Council of State. At the same time, state interventions will be an ongoing problem for foreign-invested elderly nursing homes in the near term. MCA's 2013 administrative measures for elderly nursing homes and some other legislation, for example, require elderly nursing homes to comply with the law.

In practice, pricing controls may be less problematic for high-quality elderly nursing homes, but if all or part of the cost of services comes from the government's refund programme, the cost of services is almost necessarily determined or controlled by government authorities. China's geriatric nursing sector is still in the process of maturity.

We have seen an increase in the number of international investments in the last few years. A German Augustinum enterprise founded a Chinese-foreign seniors' support initiative in Shanghai in 2006, but two years later it was partly unsuccessful due to the gloomy regulation at the time and the lack of security for property usage permission.

In 2011, Cascade Healthcare, the seniors' healthcare branch of Seattle-based Columbia Pacific, became the first overseas corporation to obtain approval from the government of China to construct seniors' nursing homes in China. Now it has locations in Beijing and Shanghai. She inaugurated her third elderly nursing home in November 2014, a 78-bed residential complex in Shanghai's Pudong district.

At present, local companies are not mature enough to create serious competitive conditions in this emerging sector, which offers good possibilities for attracting international investments to this area first. In comparison to overseas investments in health facilities that are subjected to stricter regulation constraints, overseas investments may find it simpler to set up a 100% retirement home in China and utilize their brands, knowledge and know-how at their discretion.

Against the backdrop of this trend, we should see a booming influx of Chinese seniors' nursing investments from overseas corporations and venture capital firms, as well as the launch of other global health brand names in the Chinese markets.

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