 The announcement that overseas investors acquiring stakes in local enterprises should make a full payment within three months after getting business licenses were jointly issued last week by four government departments. It is expected to apply to overseas investors and the QFII system.
The new regulation says:
· The three months start from the day they officially get their operation licenses;
· Those that cannot pay up in time will have to pay at least 60% of the total purchase money within the first six months, the rest within a year;
· The economic returns from the new mergers will be divided according to the purchase capital paid by each side;
· Shareholders in the new venture will not have decision-making power until they pay off all the purchase capital.
The rules also make it clear that the payment period must be specified in the merger proposal submitted to the Chinese approval authority.
The foreign trade authority says that investors from Hong Kong, Macao and Taiwan regions have also been included in the scheme.
The three state administrations, the taxation, industrial and commerce, and foreign exchange, together with the Foreign Trade Ministry made the joint statement.
Government sources said the regulation might be applied to the qualified foreign institutional investors, or QFIIs. China officially announced the launch of the QFII system later last year. It says that overseas investment organizations that meet requirements can freely trade the shares and bonds of China’s domestically listed companies.
|
