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Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors
April 4, 2003 Full PDF
The Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, issued by the former Ministry of Foreign Trade and Economic Cooperation and other agencies on March 7, 2003, broadens the scope of M&A transactions by foreign investors and foreign-invested enterprises in China. They newly legitimize acquisitions of registered capital in limited liability companies, allow acquisitions with shares, allow the capitalization of new foreign-invested enterprises with assets acquired from domestic enterprises, and begin to solve China's "registered capital trap".However, they also create a new anti-monopoly review process for foreign investors that may impede many M&A transactions, including some with no direct nexus to China
Attached is a memorandum which highlights some of the most important aspects of the Interim Provisions and their relevance to foreign investors.