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

itted together with the above documents.

　　Where a foreign investor purchases the assets of a domestic enterprise by agreement and uses such assets to establish a foreign-invested enterprise， the foreign investor may not carry out business activities with su

ch assets prior to the establishment of the foreign-invested enterprise.

　　Article 16　The asset purchase agreement specified in Article 15 hereof shall be governed by the laws of China， and shall include the following main contents：

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

　　2. the inventory and the prices of the assets to be purchased；

　　3. the time limit and method of the 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 17　If a foreign investor merges with and acquire a domestic enterprise to establish a foreign-invested enterprise， the examination and approval authority shall decide to approve or disapprove the establishment according to law within 30 days of the date of receipt of all the documents required to be submitted， except otherwise provided in Article 20 hereof. If the examination and approval authority decides to approve the application， it shall issue a foreign-invested enterprise approval certificate.

　　If a foreign investor purchases the shareholder equity of a Domestic Company by agreement and the examination and approval authority decides to approve the purchase， the examination and approval authority shall at the same time copy the relevant approval document to the foreign exchange control authorities at the places where the equity transferor and the Domestic Company are located. The foreign exchange control authority at the place where the equity transferor is located shall handle the foreign investment exchange registration procedures for the equity transferor and issue the foreign investment exchange registration certificate evidencing the receipt of consideration for Equity Merger and Acquisition by the foreign investor.

　　Article 18　In an Asset Merger and Acquisition by foreign investors， the investors shall， within 30 days of the date of receipt of the foreign-invested enterprise approval certificate， apply for registration of establishment with the registration authority and obtain a foreign-invested enterprise business licence.

　　In an Equity Merger and Acquisition by foreign investors， the target Domestic Company shall apply for registration of the change with the original registration authority in accordance with these Provisions and obtain a foreign-invested enterprise business licence. If the original registration authority does not have the jurisdiction over the application， it shall transfer the application to a registration authority that has the jurisdiction within 10 days of the date of receipt of the application documents together with the registration file of that Domestic Company. The target Domestic Company shall submit the following documents when applying for registration of its change and shall be liable for the authenticity and validity of such documents：

　　1. the application for registration of change；

　　2. the resolution of the shareholders' meeting （general meeting） of the target Domestic Company in respect of the equity transfer or capital increase in accordance with the PRC， Company Law and its articles of association；

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

　　4. the amended articles of association or the amendment to the original articles of association and the contract of the foreign-invested enterprise that shall be submitted as required by law；

　　5. the foreign-invested enterprise approval certificate；

　　6. the supporting documents in respect of the identification， commencement of business，

and creditworthiness of the foreign investor；

　　7. the amended list of members of the board of directors， the document recording the names and domiciles of new directors and the appointment documents of the new directors； and

　　8. other relevant documents and certificates required by the SAIC.

　　Where there is a transfer of State-owned equity and subscription of capital increase of a company with State-owned equity by foreign investors， the approval document of the competent economic and trade authority shall also be submitted.

　　The investors shall， within 30 days of the date of receipt of the business licence of the foreign-invested enterprise， carry out the registration procedures with the relevant authorities such as the taxation， customs， land administration and foreign exchange control authorities.

　　Article 19　If a merger with and acquisition of domestic enterprise by a foreign investor is in any of the following circumstances， the investors shall report the relevant circumstances to MOFTEC and the SAIC：

　　1. the turnover of a party to the merger and acquisition in the Chinese market for the current year exceeds Rmb 1.5 billion；

　　2. the aggregate number of enterprises merged and acquired in the relevant industry in China within one year exceeds 10；

　　3. the market share of a party to the merger and acquisition in China has reached 20%； or

　　4. the merger and acquisition will result in a party to the merger and acquisition having a market share of 25% in China.

　　In cases where the above criteria have not been fulfiled， the foreign investor may also be required to give such report if so requested by the competing domestic enterprises， the relevant functional departments or industry associations and if in the opinion of MOFTEC or the SAIC a tremendous market share is involved in the merger and acquisition by foreign investors， or where other important factors such as seriously affecting market competition or the national economy， the people's livelihood and the national economic security exist.

　　A party to the merger and acquisition referred to above includes the affiliated enterprises of foreign investors.

　　Article 20　If a merger with and acquisition of domestic enterprise by a foreign investor is in any of the circumstances specified in Article 19 hereof， and is considered by MOFTEC and the SAIC to be likely to result in excessive concentration， obstruction to fair competition or harm to the interests of consumers， MOFTEC and the SAIC shall， within 90 days of the date of receipt of all the documents required to be submitted， jointly or separately after consultation call the relevant departments， authorities， enterprises and other interested parties to a hearing and decide to approve or disapprove the merger and acquisition according to law.

　　Article 21　If any of the following circumstances arises in connection with an offshore merger and acquisition， the parties to the merger and acquisition shall submit the merger and acquisition proposal to MOFTEC and the SAIC before the merger and acquisition proposal is announced to the public or when it is submitted to the competent authority of the country where the parties are located. MOFTEC and the SAIC shall examine whether the merger and acquisition will result in excessive concentration in the domestic market， obstruction to fair competition in China or harm to the interests of domestic consumers， and shall decide whether or not to consent to the merger and acquisition：

　　1. a party to the offshore merger and acquisition owns assets of more than Rmb 3 billion in China；

　　2. the turnover of a party to the offshore merger and acquisition in the Chinese market for the current year is more than Rmb 1.5 billion；

　　3. the market share of a party to the offshore merger and acquisition and its affiliated enterprise（s） in China has reached 20%；

　　4. the market share of a party to the offshore merger and acquisition and its affiliated enterprise（s） in China will reach 25% as a result of the offshore merger and acquisition； or

　　5. the number of foreign-invested enterprises in the relevant industry in China in which a party to the offshore merger and acquisition has direct or indirect equity interests will exceed 15 as a result of the offshore merger and acquisition.

　　Article 22　In a merger and acquisition that meets any of the following criteria， one of the parties to the merger and acquisition may apply to MOFTEC and SAIC for exemption of examination：

　　1. it can improve the fair competition conditions of the market；

　　2. it restructures a loss-making enterprise and safeguards employment；

　　3. it introduces advanced technology and management personnel， and enhances the competitiveness of the enterprise in the international market； or

　　4. it can improve the environment.

　　Article 23　The documents submitted by investors shall be classified according to provisions and attached with tables of contents. All documents required to be submitted shall be in Chinese.

　　Article 24　These Provisions shall apply to merger with and acquisition of domestic enterprises by companies with an investment nature established according to law by foreign investors in China.

　　The existing laws， administrative regulations concerning foreign-invested enterprises and the Changes in the Shareholder Equities of Foreign-invested

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