Article 1. For the purpose of promoting healthy development of foreign-invested enterprises, protect the legitimate rights and interests of all investors, maintain social and economic order, base on the "Company Law" , "PRC Joint Venture Law", "PRC Foreign Joint Ventures law", "PRC Foreign Enterprise Law" and other relevant laws and regulations, it is then developed this regulations.
Article 2. For the term “Change in Formalities” here, it refers to those within the territory of China, in accordance with Chinese law, establish equity joint ventures, sino-foreign cooperative enterprises and foreign-invested enterprises (hereinafter referred to as corporate) investors, or at funded enterprises (including the provision of conditions for cooperation), shares (hereinafter referred to as equity) changes. It includes but not limited to, the following main causes of enterprises with foreign investment equity investor Change:-
(A) Equity transfer agreement between corporate investors ;
(B) Corporate investors from other investors agreed to its affiliates, or other transfer of ownership transferee ;
(C) The corporate investor agreement registered capital adjustment resulted in a change of investor equity parties ;
(D) Corporate investors from other investors agreed to pledge its equity to creditors, the pledgee or beneficiary in accordance with law and obtained the contract given equity investors ;
(E) Corporate investors bankruptcy, dissolution is revoked, the revocation or death, his heirs, creditors or other beneficiaries in accordance with law obtained the investor equity ;
(F) The merger or division of corporate investors, merger or demerger of its successor after successor of the original investors in equity law ;
(G) Corporate investors do not fulfill corporate contracts and articles of association of the contribution obligation, as approved by the original examination and approval authority, investors or replacement the change of ownership.
Article 3. Corporate equity investors should comply with the relevant Chinese laws and regulations, and in accordance with the regulations as approved by the approving authority and the registration authority to register the change. Equity without the approval authority for approval of the change is invalid.
Article 4. Corporate investor equity changes must comply with Chinese laws and regulations on investor eligibility requirements and industrial policy requirements. According to the "Foreign Investment Industrial Guidance Catalogue", it does not allow wholly foreign-owned industries, equity change does not result in a foreign investor which holds the entire equity interest in the enterprise; due to change of equity leaving the business into foreign but it must comply with the "People's Republic of Conditions for Foreign establishment of Foreign Law Enforcement Regulations" (hereinafter referred to as "Foreign Conditions") as stipulated. Required by the State-owned Assets controlling or dominant industries, foreign investors shall not result in change of equity and non-Chinese state-owned enterprises accounted for controlling or dominant.
Article 5. Unless transferred its entire equity interest of foreign investors, corporate investors and equity investors to China does not result in any changes to investment ratio to less than 25% of the foreign investor enterprises' registered capital.
Article 6. For other investors of the company that may agree, if it pays contributions in accordance with the relevant provisions, investors under the "PRC Security Law" (hereinafter referred to as "security law" ) and by signing the pledge contract and the approving authority to be paid pay by equity capital partially formed pledge to the pledgee. Investors cannot pledge equity portion of the unpaid contributions. Investors may not pledge the equity of the enterprise. During the pledge, the pledge identity of the investor as corporate investors remain unchanged, without quality investors and other investors agreed to enterprises, the pledgee shall not transfer the Pledged Shares; without the consent of the pledgee, the pledgor investors may not have the option to transfer or re-pledge quality. Investors and pledgee, pledgor's rights, obligations and pledge the content of the contract, the relevant provisions of the relevant laws, regulations and requirements.
Article 7. The approving authority for any change in corporate investor equity, it is the one which approved the establishment of the enterprise to do so. If the sino-foreign equity, joint venture enterprise alter its Chinese investors to become a foreign one, and the company is engaged in those activities listed out under the "Foreign Association" as foreign trade restriction as required by regulation, for the part the Chinese investors' equity change(s), the company must obtain approval by the People's Republic of Ministry of Foreign Trade and Economic Cooperation (MOFTEC).
Due to the increase in registered capital equity, investors and those lead to a change in its total investment, it has exceeded the original approval authority. The change in equity investors in the enterprise should be reported to higher authorities for approval in accordance with the approval authority for approval and the relevant regulations. Changes in corporate equity investor, registration authority for the original registration authority, must be approved by the Ministry of Foreign Trade shareholding changes by the State Administration for Industry and Commerce or the original registration authority entrusted to register the change.
Article 8. When equity investors in the Chinese state-owned assets investment change, it must be approved by the relevant state-owned assets evaluation agencies. It needs to change the conduct of the equity valuation, and to be confirmed by the state-owned assets management department. The confirmed results of assessment should be used as the basis for pricing options change.
Article 9. Since the sub-provisions of this Article, sub-provisions 2 (A) and (B), reasons for the need to change shareholding of a company, it shall submit the following documents:-
(A) an application for change of equity investors ;
(B) the original contract, articles of association and the proposed amendment agreement ;
(C) the approved certificate and business license ;
(D) corporate board resolution regarding investor equity changes ;
(E) a list of members of the Board of investors or equity firms after the change ;
(F) the transferor and the transferee; and signed by other investors , or otherwise in writing signed by a recognized equity transfer agreement ;
(G) other documents as required by the approving authority.
Article 10. The equity transfer agreement should include the following main elements:-
(A) the name of the transferor and transferee, domicile, legal representative 's name, title, nationality ;
(B) the transfer of ownership of shares and prices ;
(C) the transfer of ownership and manner of delivery period ;
(D) the transferee claimed venture contract and articles of association enjoyed and obligations ;
(E) consequence for breach of contract ;
(F) The applicable law and dispute settlement ;
(G)The commencement and termination protocol ;
(H) Time and location for signing the agreement .
Article 11. For the above provisions, the reasons for the need to change, it should comply with the relevant special provisions of MOFTEC and the State Administration for Industry and the enterprise shall submit (A), (B), (C), (D), (E), it shall also submit to the approving authority the signed by corporate investors.
Article 12. For Corporate investors and the pledgee enter into an equity pledge contract, it shall submit the following documents for review by the approval authority which approved the establishment of that enterprise:-
(A) corporate board of directors and other investors’ resolution agreeing the quality of its equity investors will pledge:-
(B) the pledgor and the pledgee – the signed pledge contract ;
(C) the quality of investors’ capital contribution certificate ;
(D) for the Chinese registered accountants and their firms’ verification report issued by the enterprise, preceding receipt from the approval authority shall be required, and from the date of the decision, within 30 days deciding for approval or disapproval. Companies should obtain the consent of its investors from the approving authority, and shall within 30 days after the approval of the quality options, hold the original approval documents relating to the registration to the authority for record. Failure to apply this provision will invalid the pledge.
Article 13. In accordance with the provision of Article 13 of the "Pledge Law", upon the pledged shares transfer to the pledgee or other beneficiaries, the enterprise shall submit, to the approval authority, in addition to those documents of Article 9 item (A), (B), (C), and (E), they should also submit to the pledgee or other beneficiaries to obtain valid documents of the original investors in equity. The approving authority shall review in accordance with the provisions of these documents and the documents referred to Article 12 and the provisions of relevant laws and regulations.
Article 14. In the provisions of Article 16 (E) , (F), the reasons for the need to change the options, the enterprise shall submit (A) , (B) , (C) , (E) , the provisions set out the documents in addition, options should be submitted to the approving authority to obtain valid documents as obtained by the original investors in equity.
Since the provisions, article 2 (E) , (F) of the changes that led to corporate investors , other investors if the company does not agree to continue to operate, it may apply to the approval authority for the termination of the original enterprise contract and articles of association. For original business contract, upon the termination of the Articles of Association, shall be entitled to participate in the equity of the liquidation committee to obtain and distribute the remaining assets after liquidation; If the option does not agree to continue to operate to get people through enterprise other investors agreed to in accordance with the provisions of its equity transfer, other investors to the enterprise or a third person.
Article 15. In the provision(s) of Article 2 (G), the reasons for the need to replace or change the equity investors, observant investors the right to unilaterally change the application to the approval authority. In addition to observing investor, it shall submit, ( A ) , (B ) , (C ) , ( E) as the required documents that should be submitted the following documents to the approving authority :-
( A ) by a Chinese registered accountants and their firms verification report issued by the enterprise ;
( B) the observant urging the breaching party to pay or paid documents funded. If it is a new equity investor, the report to the approving authority must send with a new investor legitimate business and credit certificate. Defaulting party has to pay part of the enterprise in accordance with the original contract and articles of association. It should submit to the approving authority, the part of the company defaulting that will be funded cleanup of the relevant documents.
Article 16. For Chinese investors to invest in the equity of state-owned assets change, companies must submit the following documents to the approving authority:-
(A) Equity departments or authorities of the Chinese investors' point of view changed with signature thereon ;
(B) State-owned assets evaluation agencies need to change the equity asset appraisal report issued ;
(C) The state-owned assets management department of the above asset appraisal report issued confirmation .
Article 17. The approval authority shall, from the date of all documents submitted, within 30 days, to make the decision to approve or not to approve the application. Enterprises should, from the date of approval on change of investor or equity firms, within 30 days from the approval authority for foreign investment enterprise issued approval certificate, proceed the change procedures. Chinese investors which access to the entire equity interest of enterprises, shall from the date of approval for approving authority from the corporate equity investors, within 30 days of the change, the approval authority shall hand in foreign investment enterprise approval certificate. Revocation of the approval authority from foreign-invested enterprises, shall within 15 days after the certificate of approval, issued notice of revocation foreign investment enterprise approval certificate to the business of the original registration authority.
Article 18. Enterprise shall change or hand in, within 30 days from the date of the foreign investment enterprise approval certificate issued, in accordance with the "People's Republic of Corporate Registration Regulations" and its relevant provisions of the "PRC Company Registration Regulations", etc., apply to the registration authority register for change. Failure to act in accordance with the provisions of the registration authority for the modification registration, the registration authority shall punish in accordance with relevant regulations.
Article 19. The relevant documents, which is used for applying equity firm change of registration, shall be submitted to authorities for approval. Approval documents and the registration authority approval authority may require other documents to be submitted. As the provisions of Article 2 ( G) of the reasons for the need to replace or change the equity investor registration , in addition to the registration authority, it shall submit the documents specified in Article 15 , the Board shall also submit new corporate office documents and the identity Board certification and new resolutions . Equity firms as investors change the entire equity investors leaving the Chinese companies, when applying for change of registration, the establishment of the enterprise intends to change the type of business should the registration requirement to submit the relevant documents to the registration authority. If approved by the registration authority, then it can be handed in the "PRC Corporate Business License” for renewal.
Article 20. Diershitiao equity transfer agreement and modify the original contract, articles of agreement change(s) will come into effect since the date of issuance of the certificate of approval of foreign-invested enterprises. After the agreement come into effect, corporate investors enjoy such rights in accordance with corporate contract, the revised articles of association and assume the obligations.
Article 21. In addition to the laws and regulations provided, the foreign investment in the transfer of shares of unlisted corporation refers to the implementation of this provisions.
Article 22. In Hong Kong, should the corporate investor's equity change, Macau and Taiwan companies, enterprises and other economic organizations or individuals to invest in other parts of China organized should refer to these regulations.
Article 23. This provisions promulgated with effect from the date of issue.