外国投资者并购境内企业暂行规定 Merger with and Acquisition of Domestic Enterprises by Foreign Investors Tentative P

the assets of a domestic enterprise and to operate such assets， the investors shall pay the portion of the capital contribution that equals to the amount of the consideration for such assets within the time limit for payment of consideration specified in the first paragraph of this Article， and the time limit for paying the rest of the capital contribution shall be agreed upon in the format specified in the second paragraph of this Article.

　　If a foreign investor establishes a foreign-invested enterprise upon merger and acquisition of domestic enterprise and the ratio of the capital contribution of the foreign investor is less than 25%， the capital contribution of the investors made in cash shall be paid in full within three months of the date of issue of the business licence of the foreign-invested enterprise. The capital contribution of the investors made in kind and/or industrial property rights shall be paid in full within six months of the date of issue of the business licence of the foreign-invested enterprise.

　　The means of payment for consideration shall comply with the provisions of the relevant laws and administrative regulations of the State. If a foreign investor uses the shares over which he has the right of disposal or the Renminbi-denominated assets legally owned by him as means of payment， such payment shall be subject to verification and approval of the foreign exchange control authorities.

　　Article 10　After a Domestic Company has been converted and re-established as a foreign-invested enterprise upon the purchase by a foreign investor of its shareholder equity by agreement， the registered capital of such foreign-invested enterprise shall be the registered capital of the original Domestic Company， and the ratio of capital contribution of the foreign investor shall be the ratio of its purchased equity in the original registered capital. If the Domestic Company subject to Equity Merger and Acquisition increases its capital at the time of merger and acquisition， the registered capital of the foreign-invested enterprise established upon merger an

d acquisition shall be the sum of the registered capital of the original Domestic Company and the amount of capital increase. The foreign investor and the other original investors of the target Domestic Company shall determine the ratios of their respective capital contribution to the registered capital of the foreign-invested enterprise on the basis of the asset appraisal of the Domestic Company.

　　After a Domestic Company has been converted and re-established as a foreign-invested enterprise upon subscription by a foreign investor of the capital increase of the Domestic Company， the registered capital of such foreign-invested enterprise shall be the sum of the registered capital of the original Domestic Company and the amount of the capital increase. The foreign investor and the other original investors of the target Domestic Company shall determine the ratios of their respective capital contributions to the registered capital of the foreign-invested enterprise on the basis of the asset appraisal of the Domestic Company.

　　Subject to approval， the Chinese natural person shareholders of the Domestic Company subject to Equity Merger and Acquisition who have held the status of shareholders in the original company for over one year may continue to be Chinese investors of the foreign-invested enterprise established after the conversion.

　　Article 11　In an Equity Merger and Acquisition by foreign investors， the upper limit of the total investment amount of the foreign-invested enterprise to be established upon merger and acquisition shall be determined in accordance with the following proportions：

　　1. if the registered capital is less than US$2，100，000， the total investment amount shall not exceed the registered capital by 70%；

　　2. if the registered capital is over US$2，100，000 and not more than US$5，000，000， the total investment amount shall not exceed the registered capital by 2 times；

　　3. if the registered capital is over US$5，000，000 and not more than US$12，000，000， the total investment amount shall not exceed the registered capital by 2.5 times；

　　4. if the registered capital is over US$12，000，000， the total investment amount shall not exceed the registered capital by 3 times.

　　Article 12　In an Equity Merger and Acquisition by foreign investors， investors shall submit the following documents to the examination and approval authority with the relevant examination and approval power based on the total investment amount of the foreign-invested enterprise to be established upon merger and acquisition：

　　1. the unanimous resolution of the shareholders of the target domestic limited liability company concerning the consent to the Equity Merger and Acquisition by the foreign investor or the resolution of the shareholders' general meeting of the target domestic company limited by shares concerning the consent to the Equity Merger and Acquisition by the foreign investor；

　　2. the application of the target Domestic Company for conversion and re-establishment as a foreign-invested enterprise according to law；

　　3. the contract and articles of association of the foreign-invested enterprise to be established upon merger and acquisition；

　　4. the agreement for purchase of the shareholder equity of the Domestic Company or for subscription to the capital increase of the Domestic Company by the foreign investor；

　　5. the financial auditor's report of the target Domestic Company for the most recent financial year；

　　6. the supporting documents in respect of the identification， commencement of business and creditworthiness of the investors；

　　7. the details of the enterprises in which the target Domestic Company has invested；

　　8. the （copies of） business licences of the target Domestic Company and the enterprises in which it has invested；

　　9. the placement plan for the staff and workers of the target Dome

stic Company； and

　　10. the documents required to be submitted according to Articles 7 and 19 hereof.

　　Where the business scope， scale and the obtaining of land use rights of the foreign-invested enterprise to be established upon merger and acquisition requires permits from other relevant government departments， such relevant permits shall be submitted together with the above documents.

　　The business scope of the existing companies in which the target Domestic Company has invested shall comply with the requirements of industrial policies on foreign investment. If such requirements are not complied with， it shall be adjusted.

　　Article 13　The agreement for purchase of equity and subscription of capital increase of Domestic Companies specified in Article 12 hereof shall be subject to the laws of China， and shall include the following main contents：

　　1. the particulars of the parties to the agreement， including their names， domiciles and the names， positions and nationalities of their legal representatives， etc.；

　　2. the amount and price of the equity to be purchased or the capital increase to be subscribed；

　　3. the time limit and method of performance of the agreement；

　　4. the rights and obligations of the parties to the agreement；

　　5. liabilities for breach of contract and resolution of disputes； and

　　6. the date and place of the signing of the agreement.

　　Article 14　In an Asset Merger and Acquisition by foreign investors， the total investment amount of the foreign-invested enterprise to be established shall be determined according to the transaction price of the assets purchased and the actual scale of production and operation. The ratio of the registered capital to the total investment amount of the foreign-invested enterprise to be established shall comply with the relevant provisions.

　　Article 15　In an Asset Merger and Acquisition by foreign investors， the investors shall submit the following documents to the examination and approval authority with the relevant examination and approval power based on the total investment amount， enterprise type and industry of the foreign-invested enterprise to be established upon merger and acquisition and in accordance with the laws， administrative regulations and departmental rules concerning establishment of foreign-invested enterprises：

　　1. the resolution of the party or authority holding the ownership of the domestic enterprise concerning the consent of the sale of the assets；

　　2. the application for establishment of the foreign-invested enterprise；

　　3. the contract and articles of association of the foreign-invested enterprise to be established；

　　4. the asset purchase agreement between the foreign-invested enterprise to be established and the domestic enterprise， or， the asset purchase agreement between the foreign investor and the domestic enterprise；

　　5. the articles of association and （copies of） the business licence of the target domestic enterprise；

　　6. proof of notice and announcement to the creditors of the target domestic enterprise；

　　7. the supporting documents in respect of the identification， commencement of business and creditworthiness of the investors；

　　8. the placement plan for the staff and workers of the target Domestic Company； and

　　9. the documents required to be submitted according to Articles 7 and 19 hereof.

　　If the purchase and operation of the assets of the domestic enterprise pursuant to the preceding paragraph requires permits from other relevant government departments， such relevant permits shall be subm

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