The Implementing Opinion issued jointly by the State Administration for Industry and Commerce, the Ministry of Commerce, the General Administration of Customs adn teh State Administration of Foreign Exchange clarifies issues such as organizational structure, incorporation form, timing and documentary requirements pertaining to approval applications, registration and capital contribution of foreign-invested enterprises, reinvestment requirements as well as approvals and registration of amendment. In particular, it elaborates on the basic rules in Article 218 of the Company Law on the applicability of laws to foreign-invested companies, and establishes the position that Company Law should govern foreign direct investment in China unless pre-empted by FIE laws. The Opinion also produces a list of FIC classification, including 13 FIEs formed as limited liability companies and 10 as foreign-invested companies limited by shares. The respective roles of board of directors, the shareholders' meeting, and the articles of association in corporate governance of various FIE structures are delineated.
The Tentative Measures allow PRC institutions and residents to invest in foreign financial products through PRC commercial banks, thus broadening their investment channels.
The Circular symbolizes further liberalization of the capital account foreign exchange purchase and remittance by PRC entities for making outbound foreign investments, following previous attempts in 2003 and 2005.
New restrictions are in place on share offering, price floor and private placements in particular for foreign strategic investors. A new three-stage application process is introduced.
After a one-year suspension of new share sales, the Measures reopen the PRC's stock market with tightened listing requirements. Meanwhile, the Measures removed restrictions on the amount of IPO proceeds and the one-year lock-up prior to the IPO.
In an attempt to clarify and modernize the PRC's regulations governing the public and private offerings of securities by listed companies, the Measures specified the three general requirements regarding the issuer's compliance record, profitability and accounting reports.
The Opinion clarifies issues such as organizational structure, incorporation form, timing and documentary requirements pertaining to approval applications, registration and capital contributions of foreign-invested enterprises, reinvestment requirements as well as approvals and registration of amendment.