How to choose the best investment vehicle
For inbound investors, navigating the maze of available structures can be tricky. The development of the PRC Anti-monopoly Law has led to more scrutiny of acquisitions of Chinese companies, causing potential foreign investors to look at other ways of investing in the country; Danone’s experience with Wahaha has in turn revealed potential pitfalls for joint ventures
Issue: June 2009
Keywords (click to search):
[foreign investment]
[joint venture]
[foreign-invested enterprise]
[wholly foreign-owned enterprise]
[anti-monopoly]
[Danone]
[Wahaha]
For inbound investors, navigating the maze of available structures can be tricky. The development of the PRC Anti-monopoly Law has led to more scrutiny of acquisitions of Chinese companies, causing potential foreign investors to look at other ways of investing in the country; Danone’s experience with Wahaha has in turn revealed potential pitfalls for joint ventures. This month China Law & Practice asks three specialists the pressing China question:
How should foreign investors choose the best investment vehicle?
The international perspective
The Danone/Wahaha case is a high-profile reminder that thorough pre-investment negotiations are fundamental, as is the subsequent nurture of business relationships. The case does not indicate that Sino-foreign joint ventures are no longer good investment vehicles. As always, the investment vehicle of choice remains a question of each investor’s objectives and what is permitted under Chinese law.
Anti-trust filings have been required since 2003, and the...
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