Guidelines for Trust Companies to Operate a Private Equity Investment Business in China

| BY

clpstaff &clp articles

The China Banking Regulatory Commission recently issued guidelines which provide additional legal basis and specific operational guidelines for trust companies in China. By Allen Zhou, Paul, Hastings, Janofsky & Walker partner.

In the past, the Measures for the Administration of Trust Companies (信托公司管理办法) and the Measures for the Administration of Trust Companies' Trust Plans of Assembled Funds provided a legal foundation for trust companies to operate a private equity investment business in China. Under such rules, trust companies could operate a “capital trust business” and make investments through the acquisition of equity or property, or through the extension of debt. The China Banking Regulatory Commission's (CBRC) recently issued Operational Guidelines for Trust Companies to Operate the Trust Private Equity Investment Business (信托公司私人股权投资信托业务操作指引) (the Guidelines), provides further clarity and clearer direction for trust companies operating a private equity investment business in the PRC.

Private equity funds in China typically use one of the three following legal structures:

This premium content is reserved for
China Law & Practice Subscribers.

  • A database of over 3,000 essential documents including key PRC legislation translated into English
  • A choice of newsletters to alert you to changes affecting your business including sector specific updates
  • Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
For enterprise-wide or corporate enquiries, please contact our experienced Sales Professionals at +44 (0)203 868 7546 or [email protected]