A Practical Approach for M&A in China after Global Financial Crisis

Transcription

1 A Practical Approach for M&A in China after Global Financial Crisis Audrey Chen Tel: Beijing, China American Bar Association Section of Business Law Spring Meeting April, 2010

2 Jun He Established in 1989, the first partnership law firm in China Offices: Beijing, Shanghai, Dalian, Shenzhen, Haikou, Hong Kong and New York Best Chinese Law Firm of the Year awarded by Asia Legal Business The Best Law Firm in China awarded by Chamber s Global 2

3 Overview I. Central Government Policies and Directions II. III. IV. Key Issues in FDI and M&A Updated Legislations for Foreign Investment and M&A The Practical Approach for Foreign Investment and M&A in China V. PRC Approval Requirements for Overseas Investment 3

4 I. Central Government Policies and Directions Being Selective to Foreign Investment Key Industries Control (NDRC role) Decentralization of the Approval Authorities 4

5 II. Key Issues in Foreign Direct Investment and M&A Restrictions of Foreign Investment Business Structures-entities commonly used by foreign investors Business Structures-the process of setting up a CJV in China Other Issues to be Considered 5

6 Restrictions of Foreign Investment Foreign Investment Catalogue -categories of foreign investment Encouraged Permitted Restricted Prohibited

7 Business Structures entities commonly used by foreign investors Joint ventures equity joint venture (EJV), cooperative joint venture (CJV) Wholly foreign owned enterprise (WFOE) Holding company Representative office of foreign company 7

8 Business Structures-the process of setting up a CJV in China Letter of intent Name pre-registration JVC/AOA preparation Project application approval from NDRC JV establishment approval from MOC Related Permits beforeset up Business license issued by SAIC Various post-set up formalities Related Permits and Approvals 8

9 Other Issues to be Considered State-owned Asset Administration and evaluation Assumption of debts Employees Transfer Determination of purchase price, various methods of payment and timing of payment PRC residents equity ownership/return investment 9

10 III. Updated Legislations for Foreign Investment and M&A Commercial Bank M&A Loans Foreign Investment in Central-Western China Favorable Policies in Certain Industries Taxation of Representative Offices of International Companies SAIC s Rules on Foreign Invested Partnerships Developments on Merger Control New Policy issued by State Council on April 6, 2010 to further encourage foreign investment 10

11 Taxation of Representative Offices of International Companies Tax Filing on Actual Basis Two Deemed Profit Methods Increase of Deemed Profit Rate Value-added Tax and Business Tax Payable Conditions for Enjoying Treaty Benefits

12 SAIC s Rules on Foreign Invested Partnerships Existing Models of Foreign Investment in RMB Funds FIVCE Model Indirect Model Parallel Funds Model New Model Recognized by Registration Rules and its Main Features Issues to be Clarified or Pending on Development

13 Developments on Merger Control Law and MOFCOM Practice Legislation Development M&A Rules Anti-Monopoly Law Regulations of the State Council on the Thresholds of Filing of Concentration of Business Operators Guidelines on Submission of Filing Documents and the Application Form Guidelines for Anti-Monopoly Review/Anti- Monopoly Review Flow Chart MOFCOM s Recent Merger Control Practice

14 IV. The Practical Approach for Foreign Investment and M&A in China Fully understand the background, reasoning and expectation of such change Possible investment structures change/alternatives Conduct feasibility study and understand associated legal risks Pay close attention to the rapidly change regulatory regime Work out feasible strategies with the advisors in compliance with the legal regime 14

15 V. PRC Approval Requirements for Overseas Investment Roadmap to Overseas Investment and related Approval Thresholds Pre-Filing with SAFE Project Review and Approval by NDRC Project Approval by the MOC Registration with SAFE Recent Overseas M&A and Planned M&A 15

16 Audrey Chen Joined the firm in 1993 LL.M., People University of China LL.M., University of California at Berkeley, School of Law (Boalt Hall) Admitted in China and U.S. (New York and California) 2010 Asia Leading Attorney by Asia Legal Business 16

17 非常感谢! 陈子若律师 (Direct Line)