Legal Regime of Equity Contribution in China and its Implications for Direct Investment

efore the revised PRC Company Law became effective on January 1 2006 (Company Law), investors found little success in their filings at the administrations for industry and commerce in China (AICs) when they wanted to make capital contributions to a company with their equities in another company (Equity Contribution).

The Company Law provides that any assets which can be lawfully transferred and appraised in currency can be used as capital contribution. As equity is generally regarded as transferable and