Trend-setter Shanghai
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clpstaff &clp articlesA new set of rules heralds easier access to Chinese investments for overseas private equity funds
On January 11, the Shanghai municipality officially published its Implementing Measures for the Launch of a Pilot Foreign-invested Equity Investment Enterprise Project in the Municipality (上海市关于本市开展外商投资股权投资企业试点工作的实施办法) (Measures). The Measures provide detailed rules regarding how to set up a Foreign-invested Equity Investment Enterprise (FIEIE) and a Foreign-invested Equity Investment Management Enterprise (FIEIME).
The main purpose of the Measures is to solve hotly-debated issues regarding foreign exchange funds and the legal status of a foreign-invested private equity (PE) fund. Chapter 4 of the Measures is a key part related to the pilot project of FIEIEs and FIEIMEs (Pilot Programme). If an FIEIME or an FIEIE is qualified under the Pilot Programme, Chapter 4 provides solutions to the following three key issues: (i) restrictions of the State Administration of Foreign Exchange (Safe) Circular 142 on an FIEIME when investing in its managed fund; (ii) foreign exchange issues of an FIEIE; and (iii) the legal status of an FIEIE.
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