two similar concepts that get conflated into the single word “ownership”
Sounds like “owner” vs “manager”.
So, if I understand it correctly, you are allowed to create a company that is owned by state but managed by you, and you can redirect your tax money there. (I assume that if you are too busy to run two companies, it would also be okay to put your subordinate in charge of the state-owned company.)
I am not an expert, but it reminds me of how some billionaires set up foundations to avoid paying taxes. If you make the state-owned company do whatever the foundation would do, it could be almost the same thing.
The question is, why would anyone care whether the state-owned company actually generates a profit, if they are not allowed to keep it? This could means different things for different entrepreneurs...
a) If you have altruistic goals, you could use your own company to generate profit, and the state-owned company to do those altruistic things that don’t generate profit. A lot of good things would happen as a result, which is nice, but the part of “generating profit for the public” would not be there.
b) If the previous option sounds good, consider the possibility that the “altruistic goal” done by the state-owned company would be something like converting people to the entrepreneur’s religion, or lobbying for political changes you oppose.
c) For people without altruistic or even controversially-altruistic goals, the obvious option is to mismanage the state-own company and extract as much money as possible. For example, you could make the state-owned company hire your relatives and friends, give them generous salary, and generate no profit. Or you could make the state-owned company buy overpriced services from your company. If this would be illegal, then… you could do the nearest thing that is technically legal. For example, if your goal is to retire early, then the state-owned company could simply hire you and then literally do nothing. Or you would pretend to do something, except that nothing substantial would ever happen.
The intention is that there would be not two separate companies, but one company which is split between being owned fully by the entrepreneur, and being managed by the entrepreneur- so the entrepreneur would still be motivated to make the company do as well as possible, thereby generating revenue for the public at large
Sounds like “owner” vs “manager”.
So, if I understand it correctly, you are allowed to create a company that is owned by state but managed by you, and you can redirect your tax money there. (I assume that if you are too busy to run two companies, it would also be okay to put your subordinate in charge of the state-owned company.)
I am not an expert, but it reminds me of how some billionaires set up foundations to avoid paying taxes. If you make the state-owned company do whatever the foundation would do, it could be almost the same thing.
The question is, why would anyone care whether the state-owned company actually generates a profit, if they are not allowed to keep it? This could means different things for different entrepreneurs...
a) If you have altruistic goals, you could use your own company to generate profit, and the state-owned company to do those altruistic things that don’t generate profit. A lot of good things would happen as a result, which is nice, but the part of “generating profit for the public” would not be there.
b) If the previous option sounds good, consider the possibility that the “altruistic goal” done by the state-owned company would be something like converting people to the entrepreneur’s religion, or lobbying for political changes you oppose.
c) For people without altruistic or even controversially-altruistic goals, the obvious option is to mismanage the state-own company and extract as much money as possible. For example, you could make the state-owned company hire your relatives and friends, give them generous salary, and generate no profit. Or you could make the state-owned company buy overpriced services from your company. If this would be illegal, then… you could do the nearest thing that is technically legal. For example, if your goal is to retire early, then the state-owned company could simply hire you and then literally do nothing. Or you would pretend to do something, except that nothing substantial would ever happen.
The intention is that there would be not two separate companies, but one company which is split between being owned fully by the entrepreneur, and being managed by the entrepreneur- so the entrepreneur would still be motivated to make the company do as well as possible, thereby generating revenue for the public at large