Foreign Investors Merging with or Acquiring Chinese Domestic Enterprise

China Company Registration
Hotline: 86-755-82148419, Email: susiehu@citilinkia.com, Wechat: 13823131503

Modes of Merger and Acquisition
Under the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, foreign investors may merge with or acquire Chinese domestic enterprises in the following two ways:

1.Equity merger and acquisition: A foreign investor acquires shares held by the shareholders of a domestic enterprise or contributes to the increased capital of a domestic enterprise, thereby changing its status to an FIE.

2.Asset merger and acquisition: A foreign investor establishes an FIE and through it acquires and operates the assets of a domestic enterprise, or acquires the assets of a domestic enterprise and, with such asset investment, establishes an FIE to operate the acquired assets.

Application and Registration Procedures
Foreign investors merging with or acquiring domestic enterprises to form FIEs should submit their application to MOFCOM or the provincial level foreign trade and economic cooperation department and, upon approval, apply to the registration organ for registration alteration or establishment registration. The registration organ is the State Administration for Industry and Commerce or its authorised local office.

Unless otherwise stipulated, the approval organ should decide whether or not to approve the establishment of FIEs through merger or acquisition by foreign investors within 30 days of the receipt of all documents required. The approval organ should issue the approval certificate if approval is given.

In the case of asset merger or acquisition by foreign investors, the investor should apply to the  registration organ for establishment registration within 30 days upon receipt of approval certificate for FIEs and obtain an FIE business licence.

In the case of equity merger or acquisition by foreign investors, the acquired company should apply to the original registration organ for registration alteration and obtain an FIE business licence. Where the original registration organ is not authorised to handle such formalities, it should forward the application together with the registration records of the company concerned to the duly authorised registration organ within ten days of its receipt.

Contact us
For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82143422, 86-755-82143512, or emailing to anitayao@citilinkia.com.