Ministry of Commerce General Office, Strengthening the Administration of the Examination and Approval of the Disposal of Non-performing Assets by Foreign Investors Circular

Issued: April 29 2005

Main contents: In 2001, the State Council approved to permit financial asset management companies to absorb foreign capital to participate in asset restructuring and disposal, whereby permission was given to the transfer of such non-performing assets as equity and debt owned by a company to foreign investors, or to the establishment of foreign-invested enterprises to engage in activities of disposal of non-performing assets such as debt restructuring and seeking recourse to debt owed. Establishment of such types of foreign-invested enterprises shall be submitted to the Ministry of Commerce for approval. Departments in charge of commerce at all levels, and economic and technological development zones at the national level, may not approve the establishment of such enterprises without authorization (Item One). Departments in charge of commerce at all levels and economic and technological development zones at the national level shall strictly implement the stipulations whereby no approval shall be granted for the establishment of foreign-invested debt collection companies or debt collection companies in a disguised form (Item Two). In examination and approval of foreign-invested enterprises in the categories of financial entrustment, business agency, management consultancy, financial consultancy and asset consultancy, all work units shall request enterprises to provide written undertaking of not engaging in business activities of disposal of non-performing assets such as debt restructuring and seeking recourse to debt owed (Item Three).
Related legislation: Absorption of Foreign Capital by Financial Asset Management Companies to Participate in Asset Restructuring and Disposal Tentative Provisions, Oct 26 2001, CLP 2001 No.9 p4 and Banning of Various Types of Debt Collection Companies and Rigorous Crackdown on Illegal Claiming Activities Circular, 2000