Analysis Of The Issue Of Listing And Restructuring Of Foreign Invested Enterprises

< p > < strong > 1. The main laws and regulations are < /strong > < /p >.

< p > at present, the listing and listing of foreign invested enterprises should abide by < < a href= > http://www.91se91.com/news/index_c.asp > > Company Law > /a >, < < Securities Law > > < < initial public offering and listing management > > > < Regulations on listing of gem > and other statutes. The main policies and regulations are based on the Interim Provisions on the establishment of foreign-funded enterprises, the opinions on issues related to foreign investment of listed companies, and seventeenth rules for the disclosure of company information rules of public offering securities, the special provisions on the contents and formats of Companies Limited by Shares with Foreign Investment prospectus, and they have the priority application effect.

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< p > < strong > two, special problems that should be paid attention to in the process of restructuring and listing of foreign invested enterprises < /strong > < /p >

< p > Companies Limited by Shares with Foreign Investment must be established in accordance with the company law and Interim Provisions. All the capital is made up of equal shares. The shareholders are liable to the company for the shares they subscribed. The company is responsible for the company's debts with all the property, and the Chinese and foreign shareholders share the shares of the company, and the shares purchased and held by foreign shareholders account for more than 25% of the registered capital of the company.

That is to say, if the promoter is all foreign shareholder, it is not allowed. < /p >

< p > according to the relevant regulations, < a href= "http://www.91se91.com/news/index_c.asp" > foreign investment enterprises < /a > restructuring and listing should pay special attention to the following matters: < /p >

< p > < strong > (1) the special requirements of the promoters < /strong > < /p >

< < /a >, Companies Limited by Shares with Foreign Investment is established in China by foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign shareholders) and Chinese companies, enterprises or other economic organizations (hereinafter referred to as China's shareholders). Among them, the companies established by sponsorship should be in compliance with the requirements of the promoters under the company law. At least one promoter should be a foreign shareholder. In addition to meeting the aforesaid conditions, at least one sponsors should have a record of continuous profit in the first 3 years of the stock raising and should provide an audited financial report. The pfer of the shares of the initiator shall be carried out after 3 years of registration of the company and approved by the original approval authority of the company. < p > < < a href= > http://www.91se91.com/news/index_c.asp > Interim Provisions.

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< p > above all, first of all, in addition to having more than 2 people and less than 200 people, and more than half of the sponsors who have domicile in China, the initiator who participates in the reorganization must have at least one initiator for foreign shareholders, and at the same time there must be at least one promoter who is a Chinese shareholder and not a natural shareholder. However, according to the provisions on foreign investors' acquisition of domestic enterprises, the Chinese natural person shareholders who are acquired by shares in the stock company can continue to be a Chinese investor in the foreign-funded enterprises established after the change.

That is to say, according to the current regulations, if a wholly foreign-owned enterprise in a foreign-invested enterprise wants to complete the restructuring and listing, it must introduce the Chinese natural shareholder (i.e. the legal person shareholder) in the restructuring stage.

In addition to the aforesaid conditions, at least one sponsors shall have a record of continuous profit in the first 3 years of the stock raising and must provide an audited financial report.

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< p > secondly, the Interim Provisions on the pfer of shares of the promoters must be made 3 years after the establishment of the company. This provision is stricter than the provisions of the current company law "not pferable within 1 years from the date of incorporation."

But the regulation is still valid.

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< p > < strong > (two) special requirements for issuer's equity and equity structure < /strong > < /p >

< p > according to the Interim Provisions, the registered capital of the Companies Limited by Shares with Foreign Investment is the total amount of paid up capital registered with the registration authority, with a minimum of RMB 30 million yuan.

Among them, the shares purchased and held by foreign shareholders should not be less than 25% of the registered capital.

According to the relevant provisions of the company law, the minimum amount of Limited by Share Ltd's registered capital is RMB 5 million yuan, and the "management method" requires that the issuer's total capital stock before issuing is no less than RMB 30 million yuan (medium and small board), while the total amount of capital stock issued before the issuer of the gem is not required. It only requires that the total capital stock after issuing is no less than 30 million yuan.

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< p > we should also pay attention to the fact that the shares purchased and held by foreign shareholders in the Companies Limited by Shares with Foreign Investment after the completion of the restructuring must reach more than 25% of the registered capital of the company so as to maintain the legal nature of the foreign-invested enterprises and enjoy the treatment of foreign-invested enterprises. Otherwise, the enterprises after the completion of the reform will not be treated as foreign-invested enterprises, and they will not enjoy preferential policies for foreign-invested enterprises.

With regard to the issue of shareholding of foreign stocks after the listing and listing of Companies Limited by Shares with Foreign Investment, a number of opinions require that the proportion of foreign capital stock in total capital stock should be no less than 10%. According to the regulations, Companies Limited by Shares with Foreign Investment should be controlled by the Chinese side (including relative holding) or with special provisions on the proportion of Chinese shares. After listing, the Chinese holding status or shareholding ratio should continue to be maintained according to the relevant requirements.

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< p > < strong > (three) special requirements for profit recording < /strong > < /p >

< p > according to the interim regulations, Sino foreign equity joint ventures, Sino foreign cooperative ventures and foreign-funded enterprises have been set up, and the application for conversion to Companies Limited by Shares with Foreign Investment should have a profit record of 3 consecutive years. However, in contrast, the company law does not require continuous changes in the profits of the limited liability companies as a whole. From this point of view, the state's requirements for the restructuring of foreign-funded enterprises are more stringent than those of domestic enterprises.

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< p > < strong > (four) special requirements for foreign investment in industrial policies < /strong > < /p >

< p > according to the regulations, the establishment of Companies Limited by Shares with Foreign Investment should comply with the relevant regulations of the State concerning the industrial policies of foreign-funded enterprises. The issue of shares (A shares and B shares) within the territory of the Companies Limited by Shares with Foreign Investment must comply with the requirements of foreign investment industrial policies, and the business scope should be in line with the requirements of the "Interim Provisions for guiding foreign investment orientation" and "Guidance Catalogue for foreign investment industries".

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< p > at present, the guideline for guiding foreign investment in April 1, 2002 (the 346th order of the State Council) is the latest guide for foreign investment in China.

The guidance list for foreign investment industry (revised in 2007), implemented in December 1, 2007, is the latest policy guideline.

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< p > < strong > (five) special requirements for information disclosure < /strong > < /p >

< p > for Companies Limited by Shares with Foreign Investment, in addition to the general provisions of the CSRC on the content and Format Criteria of the prospectus, the relevant disclosure requirements should also be followed in accordance with the provisions of the special provisions.

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< p > < strong > (six) the tax preference after the foreign capital ratio is less than 25% is less than /strong > /p >

< p > according to the third provision of the circular on the handling of related matters after the cancellation of some preferential tax policies for foreign invested enterprises and foreign enterprises, if the nature of the production business of enterprises changes or the business period changes (i.e. less than 10 years' business period) after 2008, the original tax must be filled.

According to the provisions of the fifth paragraph 1 of the Interim Provisions on the treatment of merger and acquisition of foreign investment enterprises, such as merger, separation, reorganization of shares and pfer of assets, the ownership of foreign investors held before restructuring is not withdrawn from the reorganization of enterprises, but is merged into or merged into the enterprises after merger or division or retained after the reorganization of shares. No matter whether the period of operation of the enterprises before restructuring is applied, the eighth provisions of the tax law concerning the payment of tax already exempted or reduced are not applicable.

(that is, the foreign investment joint-stock company does not need to make up the legal basis of preferential tax in the case of less than 25% of the proportion of foreign capital caused by the increase in capital and stock expansion of Chinese shareholders) < /p >

The following are the basic principles of practical operation: (1) if foreign investors take the initiative to withdraw capital contributions in the course of their business operations, they will not meet the standards and generally need to pay taxes; 2) if the foreign investors do not have the same proportion of capital increase to passively lead to the proportion of foreign capital which does not conform to the standard, generally, there is no need to pay taxes in the process of capital increase; the proportion of foreign investment is less than 25% due to the restructuring and capital increase. P

The SFC may give feedback on the issue during the audit process, but if it is properly explained and supported by the local tax authorities, it will not be a substantial obstacle to the initial public offering.

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