State-owned Assets Supervision and Administration Commission of the State Council, Tentative Measures for the Administration of Overseas State-owned Assets and Equity of Enterprises Directly under the Central Government

Applicability: The term “overseas state-owned assets and equity” means the equity interests arising from the capital contributions made by central enterprises (i.e. enterprises in which the State-owned Assets Supervision and Administration Commission of the State Council (Sasac) performs the duties of investor) and their subsidiaries (i.e. wholly-owned and controlled subsidiary enterprises thereof at all levels) in various forms to overseas enterprises. The term “overseas enterprise” means an enterprise invested in and established outside China or in the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan by a central enterprise or a subsidiary thereof in accordance with local laws (Article 2).

Main contents: A central enterprise, as the entity with the responsibility of managing its overseas state-owned assets and equity, shall establish and enhance a management system for overseas state-owned assets and equity, and comply with the relevant laws of the place of registration and of listing abroad and ensure that its management of overseas state-owned assets and equity is compliant (Article 3). Overseas state-owned assets and equity shall be held by a central enterprise or a subsidiary thereof. If relevant laws of the place of registration of an overseas enterprise specify that they must be held in the name of an individual, the same shall be centrally decided or approved by the central enterprise (Article 6). Central enterprises shall strengthen their management of special purpose vehicles, such as offshore companies. If a special purpose vehicle needs to be established for the purposes of reorganisation, listing, transfer or business or management reasons, the same shall be decided or approved by the central enterprise and reported to Sasac in writing (Article 7). Where a central enterprise or a subsidiary hereof establishes a new overseas enterprise by investment, division or merger, or acquires assets and equity in an overseas enterprise for the first time by way of an acquisition or acquisition of an equity stake by investment, the central enterprise shall centrally carry out the registration of assets and equity with Sasac (Article 8). The transfer of overseas state-owned assets and equity and other such matters that involve a change in the particulars of state-owned assets and equity shall be decided or approved by the central enterprise (Article 11).

Related legislation: PRC Law on State-owned Assets of Enterprises, Oct 28 2008; Tentative Regulations for the Supervision and Administration of Enterprise State-owned Assets, May 27 2003