Provisions On The Administration Of Foreign-Invested Venture Investment Enterprises

Original Language Title: 《外商投资创业投资企业管理规定》

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     Ministry of foreign trade and economic cooperation, Ministry of science and technology, the State administration for industry and commerce, the State administration of taxation and the State administration of foreign exchange order [2003], 2nd year of the regulations on the administration of foreign-invested venture investment enterprises on October 31, 2002 Ministry of foreign trade and economic cooperation adopted at the 11th ministerial meeting, are published, as of March 1, 2003.
                                                     部长�石广生
                                                     部长�徐冠华
                                                     局长�王众孚
                                                     局长�金人庆 Secretary Guo Shuqing b OO on January 30, 3 foreign-invested venture investment enterprises Regulations Chapter I General provisions article to encourage foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) in China engaged in venture capital, establishing and improving the mechanism of venture capital in China, according to the People's Republic of China on Sino-foreign co-operative enterprises, China
Peoples Republic of Sino-foreign joint venture enterprise law, the People's Republic of China foreign company law, company law and other relevant laws and regulations, this provision is enacted.
The second foreign-invested venture investment enterprises in these rules (hereinafter referred to as VC firms) is a foreign investor or a foreign investor and the company incorporated under Chinese law, enterprises or other economic organizations (hereinafter referred to as Chinese investors), according to the provisions set up in China's venture capital for the business activity of enterprises with foreign investment.
Article referred to in this provision refers mainly to the unlisted high-tech venture investment enterprises (hereinafter referred to as the investment companies) to make equity investments, and provide business management services, with a view to obtaining investment of capital gains income.
Fourth venture can be unincorporated business organization, could also take the proprietary businesses. Unincorporated business organization of venture Enterprise (hereinafter referred to as non-venture) bear joint and several liability for the debts of the investors in the venture.
   Unincorporated business venture investors can venture contract stipulated in the unincorporated business venture enterprise assets are insufficient to pay off the debt by the seventh required investors to assume joint and several liability referred to in article, other investors are limited to its subscribed capital to take responsibility.
Using proprietary businesses venture (hereinafter referred to as company business venture) investors are limited to their respective capital contributions subscribed liable to the venture. Article fifth venture capital enterprise shall comply with the relevant Chinese laws and regulations, in line with the policy of foreign investment industries, must not harm the social and public interests of China.
    VC firms in China's legitimate businesses and the protection of the legitimate rights and interests protected by Chinese law. Second chapter established and registration sixth article established create voted enterprise should has following conditions: (a) investors number in 2 people above 50 following; and should at least has a seventh article by said of essential investors; (ii) illegal people business create voted Enterprise investors recognize paid funded total of minimum limit for 10 million dollars; company business create voted Enterprise investors recognize paid capital total of minimum limit for 5 million dollars. Except as provided in article seventh investors, the other individual investors the minimum subscribed capital shall not be less than $ 1 million.
Foreign investors to can free exchange of currency funded, China investors to Yuan funded; (three) has clear of Organization; (four) has clear legal of investment direction; (five) except will this enterprise business activities grant a home venture investment management company for management of case outside, create voted Enterprise due three name above has venture investment practitioners experience of professionals; (six) legal, and administrative regulations provides of other conditions. Seventh investor shall satisfy the following conditions: (a) to venture to the main business, (ii) in the three years prior to the application of its management of the accumulated capital of not less than $ 100 million, including at least $ 50 million has been used for venture capital. In essential investors for China investors of case Xia, this paragraph performance requirements for: in application Qian three years its management of capital cumulative not below 100 million Yuan Yuan, and which at least 50 million Yuan Yuan has for for venture investment); (three) has 3 name above has 3 years above venture investment practitioners experience of professional management personnel; (four) If a a investors of associated entity meet above conditions, is the investors can application became essential investors. Associated entities referred to in this paragraph means the investors control of an entity, or to control an entity the investor, or under common control with the investors in an entity to another entity. This paragraph by said control is refers to control party has was control party over 50% of voting; (five) essential investors and above associated entity are should not was where country judicial organ and other related regulatory institutions ban engaged in venture investment or investment advisory business or to fraud, reasons for punishment; (six) illegal people business create voted enterprise of essential investors, on create voted enterprise of recognize paid funded and the actual funded respectively not below investors recognize paid funded total and the actual funded total of 1%, and should create voted enterprise of debt bear joint responsibility
; Corporate venture investor, the venture capital company subscribed capital and real capital not less than investors subscribed capital total total actual investment of 30%.
Eighth established VC firms according to the following procedures: (a) the investor has to venture to be established provincial foreign economic and Trade Department to submit application form for the establishment and the relevant documents.
(B) the provincial Foreign Trade Department shall be completed within 15 days after receipt of all submitted materials trial and reported to the Ministry of foreign trade and economic cooperation (hereinafter referred to as the approval authority). (C) approval authorities within 45 days from the date of receipt of all submitted materials, approval of the Ministry of science and technology in business, to approve or disapprove the decision in writing.
Approval, foreign-invested enterprises approval certificate will be issued.
(D) approved the establishment of venture capital enterprise shall receive the approvals issued by the Agency of the foreign-invested Enterprise approval certificate within one month of the date, this certificate to the State administration for industry and commerce or where registration management of foreign-invested enterprises the right to the provincial administration for industry and Commerce (hereinafter referred to as registration authority) to apply for registration.
Nineth article application established create voted enterprise should to approval institutions submitted following file: (a) essential investors signed of established applications; (ii) investment parties signed of create voted Enterprise contract and the articles; (three) essential investors written statement (statement content including: investors meet seventh article provides of qualification conditions; all provides of material authenticity; investors will strictly followed this provides and the China other about legal regulations of requirements);
(Four) lawyer firm issued of on essential investors legal exists and above statement has get effective authorized and signed of legal submissions; (five) essential investors of venture investment business description, and application Qian three years its management capital of description, and its has investment capital of description, and has of venture investment professional management personnel resume; (six) investors of registered registration proved (copies), and statutory representative people proved (copies); (seven) name registration organ issued of create voted Enterprise name advance approved notice;
(H) if the prerequisite qualifications for investors is based on the seventh paragraph (d) the provisions of paragraphs, should also submit their eligible associated entities related materials; (IX) approval authority for other applications related to the establishment of documentation required. Tenth VC firms should be in the name of raising venture capital.
In addition to venture outside, other enterprises with foreign investments shall not be marked with venture capital in the name.
11th article application established create voted enterprise should to registration organ submitted following file, and on its authenticity, and effectiveness is responsible for: (a) create voted Enterprise Chairman or joint management committee head signed of established registration applications; (ii) contract, and articles and approval institutions of approved file and approved certificate; (three) investors of legal opened proved or identity proved; (four) investors of funding letter proved; (five) statutory representative people of served file, and ID Ming and Enterprise Director, and Manager, personnel of record file;
(F) the business name prior approval written notice; (VII) corporate residence or business premises to prove. Apply for the establishment of non-business venture, shall also submit the articles of association or partnership agreement of the foreign investors.
Corporate investors in the investor of the seventh of these rules provided in the fourth paragraph, shall also submit the associated entity obligations issued by its funding joint and several liability guarantee. These documents shall be in Chinese.
Using foreign language, the Chinese translation of the specification should be provided.
Venture capital registration changes should apply to the original registration organ for change registration according to law.
12th company approved by the registration authority venture capital, receiving the enterprise license; approved by the registration authority of the unincorporated business venture, receiving a business license.
    Business license shall contain the unincorporated business venture investors subscribed to the total registered capital and required name of investors. Chapter III investment and related changes to the 13th section of unincorporated business venture investors funded and related changes should comply with the following provisions: (a) can progress stages of venture investors to venture into the subscribed capital shall not exceed 5 years. Invested by venture capital according to the venture capital contract and investment company signed an agreement with the independent development. Investors should venture a contract investors payments funded liability and related measures, (ii) investor in the venture business continuance shall not reduce the amount of its subscribed capital. If accounted for funded amount over 50% of investors and essential investors agreed and create voted enterprise not violation minimum 10 million dollars recognize paid funded amount of requirements, by approval institutions approved, investors can reduced its recognize paid capital amount (but investors according to this article subsection (five) paragraph provides reduced its has investment of capital amount or in create voted enterprise investment term expires Hou reduced not using of recognize paid funded amount not this limited). In this case, investors should venture reduced subscription of its capital contribution provided for in the contract conditions, procedures and approaches, (iii) investor in the venture business continuance shall not withdraw from the venture.
Withdrawal of special circumstances really necessary, should be 50% of the total amount more than other investors agreed, and to transfer their rights to meet the requirements of article seventh new investors, and should be revised accordingly venture contract, articles of Association, and submitted to the approval authority for approval. Other investors, such as the transfer of its subscribed capital or investment capital, venture of the contract, the assignee shall comply with the relevant requirements of article sixth.
All investors should venture Enterprise contract and articles amended accordingly, and submitted to the approval authority for the record.
(D) upon the establishment of venture capital companies, if there are new investors to apply for membership, and VC firms must comply with the provisions of the contract, agreed by the investor, venture Enterprise contract and articles amended accordingly, and submitted to the approval authority for the record. (E) venture to sell or otherwise dispose of its interests in the enterprises get income equivalent to parts of its original amount, can be assigned directly to investors. Such distribution constitutes investors reduce their amount of capital investment. Create voted enterprise should in create voted Enterprise contract in the agreed this class distribution of specific approach, and in to its investors made the, distribution zhiqian at least 30 days within approval institutions and location Exchange Council submitted a copies requirements corresponding reduced investors has input capital amount of record description, while proved create voted Enterprise investors not in place of recognize paid funded amount and the create voted enterprise at has of other funds at least equivalent to create voted enterprise at bear of investment obligations of requirements.
But the assignment should not become the venture due to claims arising from their breach of any duty of the defence.
14th unlawful business venture to the registration organ for change registration, approval certificate issued by the relevant record in the above proof can replace the corresponding approval. 15th unlawful-a venture capital investor paid according to the progress of venture capital, capital verification report to the original registration organ to apply contribution record.
Registration authority according to their actual investment situation in that the contributions of the business license section raised paid-up capital after the number.
Illegal business venture for more than the maximum investment period is not paid or paid contributions, registration authority under the existing rules will be punished.
    The 16th corporate venture investors funded and related changes according to the current regulations. Fourth chapter organization 17th unlawful-a venture set up a joint management committee. Corporate venture capital Board of Directors. Joint Management Committee or a Board of Directors composed of investors in venture capital contract and articles of Association to be agreed.
Joint Management Committee or Board of Directors management venture capital companies on behalf of investors.
18th joint management committee or Board of Directors set up under the management bodies, according to venture capital contracts and rights specified in the articles, is responsible for the daily management work, implementing joint management committee or the Board of Directors of investment decisions.
The 19th head of the Management Office shall comply with the following conditions: (a) have full capacity for civil conduct, (ii) no criminal record, (iii) no bad track record; (d) should have experience in the venture capital industry, and has no record of illegal operations; (v) requested by the approval authority and management qualifications relating to the other conditions.
20th Management Office should regularly to the Joint Management Committee or Board of Directors of the following matters: (a) authorized a major investment activities; (b) medium-term and annual performance and financial reports, and (iii) other matters stipulated by laws and regulations, (iv) venture capital enterprise contract and articles of Association of the relevant matters. The 21st joint management bodies established by the Management Committee or Board of Directors may not, and delegated the day-to-day operations of the venture a venture capital management company or another venture management. The venture capital management companies can be domestic venture capital management companies or are foreign-invested venture capital management firms, venture capital management companies within or outside. In this case, the venture and the venture capital management companies should enter into a management contract, agreed to venture enterprise and venture capital management company's rights and obligations.
The management contract shall be executed by all the investors agreed and submitted to the approval authority for approval before it can take effect.
    22nd venture investors in venture capital contracts on the basis of international conventions within the income distribution mechanism and incentive mechanism.
Fifth chapter venture investment management enterprise 23rd article trustee management create voted enterprise of venture investment management enterprise should has following conditions: (a) to trustee management create voted enterprise of investment business for main business; (ii) has three name above has three years above venture investment practitioners experience of professional management personnel; (three) registered capital or funded total not below 1 million Yuan Yuan or equivalent exchange; (four) has perfect of internal control system.
24th venture capital management companies can adopt proprietary businesses, may also take the partnership organization.
25th the same venture capital management companies can manage different VC firms.
Article 26th venture capital management companies should regularly inform the delegates of the Joint Management Committee or Board of Directors matters listed by 20th. 27th the establishment of foreign-invested venture investment enterprises shall comply with the provisions of article 23rd condition, proposed to establish foreign-invested venture capital management provincial foreign economic and Trade Department of the company and approval authority for approval. Approval authorities within 45 days from the date of receipt of all submitted materials, to approve or disapprove the decision in writing. Approval, foreign-invested enterprises approval certificate will be issued.
Approved the establishment of foreign-invested venture investment enterprises shall receive the approvals issued by the Agency of the foreign-invested Enterprise approval certificate within one month from the date of holding this certificate to the registration authority for registration procedures.
28th an application for establishing a foreign-invested venture investment management company shall submit to the approval authority the following documents: (a) the application form for the establishment, (ii) foreign-invested venture investment management contract and articles of Association; (c) the investor registration certificate (copy), legal representative certificate (copy); (d) the approval authority for other applications related to the establishment of documentation required. 29th foreign-invested venture investment management company name should raise venture capital management.
In addition to administration of foreign-invested venture investment enterprises, other foreign-invested enterprises shall not be used in the name venture capital management.
30th ratification accept venture capital enterprise in China engaged in venture capital investment management business of foreign venture capital management companies shall manage contracts approved within 30th of, the registration authorities to apply for business registration procedures.
Application business registration should submitted following file, and on its authenticity, and effectiveness is responsible for: (a) outside venture investment management Enterprise Chairman or right to signed people signed of registration applications; (ii) business management contract and the approval institutions of approved file; (three) outside venture investment management enterprise of articles or partnership agreement; (four) outside venture investment management enterprise of legal opened proved; (five) outside venture investment management enterprise of funding letter proved;
(F) project leader, China overseas venture capital management company delegated authorization, resumes and proof of identification; (g) place proved offshore venture capital management companies in China. These documents shall be in Chinese.
    Using foreign language, the Chinese translation of the specification should be provided.
Sixth chapter business management 31st article Create voted enterprise can business following business: (a) to all owned funds for equity investment, specific investment way including new set enterprise, and to has established enterprise investment, and accept has established enterprise investors equity transfer and national legal regulations allows of other way; (ii) provides venture investment advisory; (three) for by investment enterprise provides management advisory; (four) approval institutions approved of other business.
Investment by venture capital funds should be used primarily to enterprises ' equity investment. 32nd article Create voted Enterprise shall not engaged in following activities: (a) in national ban foreign investment of field investment; (ii) directly or indirect investment Yu listed trading of stock and Enterprise bonds, but by investment enterprise listed Hou, create voted enterprise by holding shares exception; (three) directly or indirect investment Yu non-use real estate; (four) loan for investment; (five) misappropriated non-owned funds for investment; (six) to others provides loan or guarantees,
But venture investment enterprises of more than 1 year Enterprise bonds and can be converted to investment by investment in the equity, bond is not (this paragraph does not cover the investments companies can issue bonds); (VII) laws and regulations, as well as venture capital contract prohibits engaging in other matters.
33rd, investor should prescribe a period for foreign investment in the venture capital contract. Article 34th VC firms, mainly from selling or otherwise disposed of its equity stakes in portfolio companies for a profit. Create voted Enterprise sold or to other way disposal its in by investment enterprise of equity Shi, can law select applies of exit mechanism, including: (a) will its holding some by investment enterprise of part equity or all equity transfer to other investors; (ii) and by investment enterprise signed equity repo agreement, by by investment enterprise in must conditions Xia law repo its by holds of equity; (three) by investment enterprise in meet legal, and administrative regulations provides of listed conditions Shi can application to both inside and outside securities market listed.
VC firms can be transferred through the securities market according to law its stake owned by investment companies; (d) allowed by Chinese laws and administrative regulations in other ways.
Investment by enterprises to venture to buy back stakes in the venture and the specific measures developed separately by the approval authority in conjunction with the registration authorities. 35th venture capital enterprises shall, in accordance with the national provisions of the tax law tax according to law.
For unincorporated business venture, by the investing Parties in accordance with the relevant provisions of the State tax law, declare the payment of enterprise income tax; or unincorporated business venture enterprise applications after they have been approved, in accordance with unified computing tax pay enterprise income tax.
Unincorporated business venture enterprise specific measures for the collection and administration of enterprise income tax issued by the State administration of taxation separately.
36th article Create voted enterprise in the belongs to foreign investors of profit, returns meeting out outside of, should by Management Committee or Board of distribution resolution, by accountants firm issued of audit report, and foreign investors investment funds into proved and inspection funding report, and-paid proved and tax declared single (enjoy tax offers of, should provides tax sector issued of tax proved file), from its Exchange account in the paid or to Exchange specified bank purchased meeting meeting out. Recycling venture funded by foreign investors can purchase foreign exchange remitted by law. Company business venture opening and using an Exchange account, capital movements and other foreign matters, according to the existing foreign exchange control regulations.
Unincorporated business venture enterprise of foreign exchange regulations formulated by the State administration of foreign exchange. 37th investor should be in the contract and the articles of Association prescribe a period for venture business, no more than 12 years.
Expiration, approved by the approval authority may be postponed. Approved by the approving agency, VC firms can dissolve it, terminate the contract and regulations.
But, if illegal people business create voted enterprise of all investment are has was sold or through other way sold, its debt also has all settlement, and its remaining property are has was distribution to investors, is not needed above approved can into dissolved and terminated program, but the illegal people business venture investment enterprise should in the, dissolved entered into force Qian at least 30 days within approval institutions submitted a copies written record description.
Venture enterprise is dissolved, the liquidation shall be in accordance with the relevant provisions.
Article 38th venture capital enterprise shall, from the date of liquidation in the 30th to the registration authority for the cancellation of registration.
Application cancellation registration, should submitted following file, and on its authenticity, and effectiveness is responsible for: (a) Chairman or joint management committee head or liquidation organization head signed of cancellation registration applications; (ii) Board or joint management Committee of resolution; (three) liquidation report; (four) tax organ, and Customs issued of cancellation registration proved; (five) approval institutions of approved file or record file; (six) legal, and administrative regulations provides should submitted of other file.
Approval by the registration authority to cancel the registration, venture terminated.
    Unincorporated business venture investors assume joint and several liability does not exempt the termination of unincorporated business venture.
The seventh chapter review and supervision of the 39th venture investment, mutatis mutandis, in implementation of the provisions on guiding foreign investment direction and the provisions of the catalogue for the guidance of foreign investment industries. 40th VC firms invest in any encouraged and permitted by investment companies, investment enterprise authorized by the local foreign trade and economic cooperation should be given to the Department. Foreign economic and Trade Department of the local authority should be completed within 15 days after receipt of filing record of audit procedures and foreign-invested Enterprise approval certificate issued to the enterprises. The invested Enterprise approval certificate for foreign-invested enterprises registered with the registration authority for the registration procedure. Registration authorities in accordance with relevant laws and administrative regulations, decisions to grant registration or refuse to register.
To grant registration, foreign investment business license issued.
41st article Create voted enterprise investment Yu limit class of by investment enterprise, should to by investment enterprise location provincial outside trade competent sector proposed application, and provides following material: (a) create voted enterprise on investment funds sufficient of statement; (ii) create voted enterprise of approved certificate and license (copies); (three) create voted Enterprise (and by investment enterprise other investors) signed set of by investment enterprise contract and articles. The provincial Foreign Trade Department within 45 days from the date of receipt of the application to agree or not agree to a written reply. Reply agreed to issue approval certificate for foreign-invested enterprises. Enterprises holding the approval document and approval certificate for foreign-invested enterprises registered with the registration authority. Registration authorities in accordance with relevant laws and administrative regulations, decisions to grant registration or refuse to register.
To grant registration, foreign investment business license issued.
42nd venture capital investment belong to the progressive liberalization of foreign investment projects in the field of trade in services, according to the relevant regulations of the State for approval.
Article 43rd VC firms increased or transferred its investment in enterprise investment behavior, in accordance with section 40th, 41st and 42nd of the rules of procedure.
The 44th article should venture out his 40th, 41st, 42nd and 43rd procedure provided for in article approval authority within one month from the date of filing.
45th VC firms and funds every year in March the previous year should be raised and reported to the Agency on the use of the record. Approval authority receives the filing within 5 working days from proof of registration. The registration certificate as a venture enterprise to participate in joint inspection one of the necessary materials.
Where a record of not complying with the above provisions, the approving bodies will be punished accordingly with relevant government departments of the State Council. 46th article Create voted enterprise of by investment enterprise registered capital in the, if create voted enterprise investment of proportion in the foreign investors of actual funded proportion or and other foreign investors joint investment of proportion sum not below 25%, is the by investment enterprise will enjoy foreign investment enterprise about preferential treatment; if create voted enterprise investment of proportion in the foreign investors of actual funded proportion or and other foreign investors joint investment of proportion sum below the by investment enterprise registered capital of 25%,
The investments by enterprises will not enjoy preferential treatment for foreign-funded enterprises.
47th domestic natural persons has been set up within the investor owned companies received venture capital investment enterprises change for foreign-invested enterprises, domestic natural persons can continue to retain their original investors majority shareholder.
    48th venture management and heads of institutions and venture capital management companies who have illegal operations, in addition to shall be investigated for criminal responsibility, if the circumstances are serious, shall not continue to be engaged in venture capital investment management and related activities.
Eighth chapter supplementary articles article 49th Hong Kong S.A.R., and Macau S.A.R., and Taiwan investors in the Mainland in the area of investment in venture capital with reference to these provisions.
    50th article of the regulations by the Ministry of foreign trade and economic cooperation, Ministry of science and technology, the State administration for industry and commerce, the State administration of taxation and the State administration of foreign exchange is responsible for the interpretation. 51st these provisions come into force two OO March 1, 3.
Ministry of foreign trade and economic cooperation, Ministry of science and technology and the national administration for industry and commerce on OO on August 28, 1 on the establishment of foreign-invested venture investment enterprises issued provisional regulations of abolition on the same day. (Source: the website of the Ministry)

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