On 4 May, the Ministry of Commerce (MOFCOM) issued the Contribution of Equity in the Establishment of Foreign Investment Enterprises Administrative Measures (Consultation Draft). The consultation period closed on 20 May.
The measures, if promulgated in their draft form, would allow domestic Chinese enterprises, foreign investors and existing foreign investment enterprises (FIEs) in China to make capital contributions to new FIEs in the form of equity interests. These equity interests could be shares in a limited liability company or a joint stock limited company incorporated in China.
The draft measures apply in three scenarios: the formation of a new FIE by the establishment of a new corporate entity; the injection of capital to convert an existing domestic enterprise into an FIE; and the injection of capital to change the equity structure of an existing FIE.
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