| Foreign Mergers and Acquisitions | |
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Foreign enterprises mergers and acquisitions means foreign investor purchase local company’s share or inject capital into the company (this normally known as share acquisitions). Foreign enterprise forming WFOE and use it to purchase local companies, or foreign investor buy some local asset and use it to start a new WFOE (this is known as capital acquisitions).
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| Important Notes： |
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Foreign investor has to make their agreed payment within 3 months after the Business License issued. For some special case, they can apply for longer payment term, to pay 60% of the payment within 6 month and arrange the whole payment within 1 year. |
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Foreign Acquisitions investment amount and registered capital regulation： |
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Registered Capital
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Investment Amount
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Less than USD2.1M
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No more than 10/7
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USD2.1M – USD5M
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No more than double of registered capital
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USD5M – USD12M
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No more than 2.5 times of registered capital
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More than USD 12M
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No more than 3 times of registered capital
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Required Documents： |
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The Purchased Company’s shareholder resolution
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The Purchased Company’s asset report (issued by authorized party)
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The Purchased Company’s Amending to Foreign Owned Enterprise application form
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Reviewed and updated company contract and Articles of Association
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The takeover agreement
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The Purchased Company’s latest audit report
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Purchaser Notarization Documents
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The Purchased Company’s investment brief
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The Purchased Company and its son company
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The Purchased Company’s employee further employment planning
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| Foreign “Reinvestment” in China | |
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| Any foreign invest can form WFOE or Joint Venture. After the formation of the company, if the investor using this company name to setup a new subsidiary company or purchase other local company shares, this is known as “reinvestment” |
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| Important Notes: |
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Company must fulfill the following before they can reinvest in China： |
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1) Paid up their registered capital
2) Company is making profit
3) No bad record |
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The total reinvestment can not excess half of their total asset |
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Required Documents |
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Shareholder resolution
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Foreign Investors’ investment approval certificate and Business License
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Audit report
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Audited asset balance sheet
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Taxation proof
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Invested Company’s Articles of Association
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