Acquisition of Domestic Enterprises by Foreign Investors Tentative Provisions
外国投资者并购境内企业暂行规定
New rules for the acquisition of domestic firms by foreign investors have recently been issued, and constitute one of the most important legislative developments affecting foreign parties in China this year.
(Promulgated by the Ministry of Foreign Trade and Economic Cooperation, the State Administration of Taxation, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange on March 7 2003 and effective as of April 12 2003.)
(对外贸易经济合作部、国家税务总局、国家工商行政管理总局、国家外汇管理总局于二零零三年三月七日公布，自二零零三年四月十二日起施行。)
Article 1: These Provisions have been formulated pursuant to laws and administrative regulations for foreign-invested enterprises and other related laws and administrative regulations in order to promote and regulate investments in China by foreign investors, introduce advanced foreign technology and management expertise, make more effective use of foreign investment, realize the rational allocation of resources, ensure employment and safeguard fair competition and the economic security of the State.
第1条 为了促进和规范外国投资者来华投资，引进国外的先进技术和管理经验，提高利用外资的水平，实现资源的合理配置，保证就业、维护公平竞争和国家经济安全，依据外商投资企业的法律、行政法规和其他相关法律、行政法规，制定本规定。
Article 2: For the purposes of these Provisions, the phrase "acquisition of domestic enterprises by foreign investors" means a foreign investor's purchase by agreement of the equity of a shareholder in an enterprise other than a foreign-invested enterprise (a Domestic Company) or subscription to a Domestic Company's capital increase, resulting in the conversion of the Domestic Company into a newly established foreign-invested enterprise (an Equity Acquisition); or a foreign investor's establishment of a foreign-invested enterprise and purchase by agreement, through such enterprise, of the assets of a domestic enterprise and operation of such assets, or a foreign investor's purchase by agreement of the assets of a domestic enterprise and use of such assets to invest in and establish a foreign-invested enterprise to operate such assets (an Asset Acquisition).
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