It's SAFE Again for China Venture Capital Round-trips & Red-chip Listings
October 31, 2005 | BY
clpstaff &clp articlesChina cross-border venture capital activity and overseas listings should soon be reinvigorated by the issuance of a new circular by China's State Administration of Foreign Exchange (SAFE).
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By Neal Stender & Yan Zeng, Coudert Brothers in association with Orrick, Herrington & Sutcliffe, Hong Kong, and Xiaowei (Sherry) Yin & Ying Zhu, Coudert Brothers LLP, Beijing and Shanghai
The use of offshore special purpose companies1 controlled by PRC residents for round-trip investments2 involving transfers of assets or company equity from China to offshore, and reinvestments or loans back into China, is the focus of the new Circular on Issues Relevant to Foreign Exchange Control with Respect to the Round-trip Investment of Funds Raised by Domestic Residents Through Offshore Special Purpose Companies (关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知)(Circular)3.