Equity contribution of the Ministry of Commerce on foreign invested enterprises tentative provisions

    (September 21, 2012 the Ministry of Commerce [2012] 8th published since October 22, 2012) first in order to regulate foreign investment enterprise's equity capital, raise the level of investment facilitation, promotion of foreign investors ' investment in China, according to People's Republic of China foreign investment law, the provisions of the companies act and related regulations, this provision is enacted.

    II domestic and foreign investors (hereinafter referred to as equity investors) by way of their domestic enterprises (hereinafter referred to as equity firms) of equity investment, establishment and change of foreign-invested enterprises (hereinafter enterprise) these provisions shall apply, including:

    (A) the foreign investment enterprises established in the form of new companies;

    (B) capital increase and change of non-foreign-invested enterprises to foreign-invested enterprises;

    (C) capital increase made foreign-invested enterprises ' shareholding right to change.

    Over the alleged enterprise in China shall be a limited liability company or Corporation.

    Approval authority for the provisions of article III of the People's Republic of China's Ministry of Commerce or local commerce authorities.

    Funded by equity investors and the change of enterprises with foreign investment, except in accordance with the relevant provisions on administration of foreign investment approval outside the approved by the Ministry of Commerce and the rest by the investee enterprise of provinces, autonomous regions, municipalities and cities with municipal departments in charge of Commerce (hereinafter referred to as the provincial approval authority) is responsible for approving.

    Fourth used as equity for funding should be clear ownership, full power, are transferable according to law; equity business for foreign-invested enterprises, the enterprises shall be approved according to law, in line with the policy of foreign investment industries.

    Belongs to the following circumstances, equity shall not be used for contributions:

    (A) equity the registered capital not yet paid in full;

    (B) stock has been the establishment of pledge;

    (C) stock has been frozen in accordance with law;

    (Iv) equity Business Regulation (contractual) agreements shall not transfer of shares;

    (E) is not required to participate in or failed previous annual joint annual inspection of foreign-invested enterprises with foreign investment of equity;

    (Vi) real estate enterprises, foreign-invested companies, foreign venture capital (equity) investment shares;

    (G) laws, administrative regulations or the State Council decided that transfer of shares shall be approved and unapproved;

    (H) the laws, administrative regulations or the State Council decided that is not transferable to other situations. After fifth equity contribution, investment and equity enterprises and its direct or indirect stake in the enterprise should be consistent with the provisions on guiding foreign investment direction, the catalogue for the guidance of foreign investment industries as well as other foreign investment-related provisions not in conformity with the relevant provisions of, should report equity contribution in split before the transfer the assets, business or stock.

    Equity investment domestic and overseas investors are allowed to circumvent foreign investment management.

    Sixth used as equity for funding should be Evaluation Agency in the territory, as established by law.

    Article seventh equity investors and portfolio companies of shareholders or other investors in the equity assessment determined on the basis of equity, equivalent amounts, the amount of equity contribution.

    Equity pricing refers to the above parties in the amount of equity stake in common finds on the basis of assessment for capital transactions, equivalent equity contribution amounts refer to equity pricing amounts are counted in the part of the registered capital of the investee Enterprise equity contribution must not be higher than that of equity estimates.

    To equity pricing, subscription has been Enterprise replenishment of stock pricing amounts included in the volume.

    Eighth plenary shareholders ' equity of the investee Enterprise capital contribution pricing, investment amounts and other non-monetary property and shall not be higher than the registered capital of 70%.

    Nineth portfolio companies as a limited liability company, its total investment should be in accordance with the regulations concerning Sino-foreign joint venture enterprises with registered capital with the provisional regulations on the proportion of the total investment, in accordance with the registered capital of the investee enterprise after the equity contribution for sure.

    Tenth investor equity contribution, up to the investor or invested enterprises apply to the approval authority, submit the following documents:

    (A) equity funding applications and contribution agreement;

    (B) equity investors as capital owned by legitimate proof;

    (C) the equity firm the business license (photocopy);

    (Iv) equity business for foreign-funded enterprises should submit a copy of the approval certificate for foreign-invested enterprises and through joint annual inspection of foreign-invested enterprises related to prove;

    (E) to assess the institution's equity assessments;

    (F) assigned by the law firm and its lawyers of this article fourth and fifth issue legal opinions;

    (G) according to the foreign investment law, the administrative rules and regulations shall be submitted to the other documents relating to foreign-funded enterprises established or changes;

    (H) the laws, administrative regulations or the State Council decided that equity shareholders to transfer their ownership shall be reported to the approval, need to submit the related approval documents;

    (IX) other documents required by the approval authorities. Article 11th investment examination and approval authority shall decide to grant or refuse approval.

    Approval, by the approval authority for the issuance or renewal of the approval certificate for foreign-invested enterprises (in the remarks column raise "equity contribution is not paid").

    Equity firms for foreign-invested enterprises, and the invested enterprises approved by the different approval authorities, approval authority should be solicited equity of the investee enterprise location approval authority at the provincial level, equity firm provincial approval authority shall reply within 20 working days after receipt of letters of comment views fails to reply, as agreed.

    12th article equity funded by was investment enterprise of approval organ approved Hou, equity Enterprise for non-foreign investment enterprise of, equity enterprise should by was investment enterprise raises of foreign investment enterprise approved certificate, according to on foreign investment enterprise territory investment of provisional provides and the other about provides handle record or approval procedures, application will with made funding of equity of holds people change for was investment enterprise.

    13th equity contribution upon approval by the approving authority of the investee enterprise, equity firms for foreign-funded enterprises, according to the following processing:

    Equity funded Hou, if equity Enterprise shareholders in the still has foreign investors (containing foreign investment sex company, and foreign investment venture (equity) investment enterprise or to investment for main business of foreign investment partnership enterprise), the equity enterprise should by was investment enterprise raises of foreign investment enterprise approved certificate, according to foreign investment enterprise investors equity change of several provides to has corresponding permission of approval organ application will with made funding of equity of holds people change for was investment enterprise. Equity funded Hou, if equity Enterprise shareholders in the no foreign investors (containing foreign investment sex company, and foreign investment venture (equity) investment enterprise or to investment for main business of foreign investment partnership enterprise), the equity enterprise should by was investment enterprise raises of foreign investment enterprise approved certificate, according to foreign investment enterprise investors equity change of several provides and on foreign investment enterprise territory investment of provisional provides handle about approval or record procedures, to approval organ hand or change its

    Approval certificate for foreign-invested enterprises.

    Article 14th equity firms after the completion of the above changes, should be in accordance with the relevant provisions of the State to the local industry and commerce, taxation, customs, Foreign Exchange Administration and other departments concerned shall register such changes.

    For the investment's equity has been registered with the securities registration and clearing institution, shareholding enterprises shall, in accordance with the relevant provisions to the securities exchanges and securities registration and clearing institutions for stock transfer and transfer registrations.

    15th equity firm upon completion of the above changes, the investee enterprise should present the following documents to the approval authority for the renewal of the approval certificate for foreign-invested enterprises (in the remarks column raise "equity contribution was paid").

    (A) the description of the equity the equity change;

    (B) equity shares after change of the business license and copy of;

    (C) verified by a legally established organization equity issued capital the capital verification certificate;

    (Iv) equity enterprises after the ownership change for foreign-invested enterprises, should also be submitted after the foreign invested Enterprise approval certificate and copies;

    (E) equity business to non-foreign-invested enterprises but its operation covering the restricted areas of the catalogue for the guidance of foreign investment industries, should also be submitted to the approving authority at the provincial level on reinvestment of foreign-invested enterprises approval documents.

    16th deals with equity contribution of domestic listed companies should comply with state securities regulation, securities trading, securities registration and settlement of the relevant provisions. Foreign investors in equity the equity as the price to participate in domestic listed company introduction or transfer shares, should also apply to the management of strategic investments in listed companies by foreign investors. Letter of official approval by the Ministry of Commerce in accordance with the relevant provisions, shareholding enterprises in accordance with the provisions of this article 12th, 13th, with official approval by the letter of approval for equity business record, change, as well as for the introduction or transfer procedures.

    After the transaction is completed, a listed company to the Commerce Department to get approval certificate for foreign-invested enterprises, and pursuant to the certificate of approval to the Administrative Department for industry and Commerce for registration of change.

    Article 17th shareholders approval of the approving authority of the investee enterprise should be where the files copy to the portfolio companies of industry and commerce, taxation, customs, foreign exchange and other departments; equity investors to domestic investors, equity investor shall be copied to local tax authorities.

    18th in handling investment enterprise registration and import of foreign debt when the tax credit, should be based on the registered capital of the investee enterprise after deducting part equity contribution determined by the total investment approved.

    Article 19th equity contribution shall comply with the relevant provisions of the tax administration of the State.

    Article 20th equity contribution involves State-owned property right and management of State-owned shares in listed companies shall comply with the relevant provisions of the State-owned assets management.

    21st verification institutions, when issued by the capital verification certificate, to the investee enterprise should be the local Foreign Exchange administration departments and forensics testing.
22nd equity contribution relates to the State Council on the establishment of a foreign investor merges a domestic enterprise security examination system to the provisions of the relevant circumstances, foreign investors should be in accordance with the relevant provisions of the security review applications.

    Equity contribution part of the mergers and acquisitions of domestic enterprises by foreign investors, in addition to the application of these provisions, shall also comply with the provisions relating to mergers and acquisitions of domestic enterprises by foreign investors.

    Article 23rd involving foreign investment company's equity contribution should be consistent with relevant provisions of foreign-funded investment companies.

    Article 24th of domestic investors in equity stakes in foreign-invested companies to domestic enterprises shall comply with the provisions of this article fourth on the conditions of equity contribution.

    25th foreign investors equity stakes in domestic companies as the price for other investors to hold shares of domestic enterprises, should refer to the provisions on equity contribution conditions, stock assessment and other relevant requirements, investor equity change and to comply with the foreign investment enterprises several provisions and the regulations on mergers and acquisitions of domestic enterprises by foreign investors provisions.

    26th deals with Taiwan, Macao and overseas Chinese investment in the equity capital of the enterprise management reference to these provisions.

    27th by the Ministry of Commerce is responsible for the interpretation of these provisions. 28th article of the regulations come into effect October 22, 2012.