Pudong New Area of Shanghai Municipality, Trial Measures for the Establishment of Foreign-invested Equity Investment Management Enterprises

Pu Fu Zong Gai [2009] No.2

(Issued by the Pudong New Area People's Government on June 2 2009 and effective as of the date of issuance until June 30 2010.)

Article 1: These Trial Measures have been formulated pursuant to the Circular on Matters such as the Business Registration of Equity Investment Enterprises in Shanghai (Hu Jin Rong Ban Tong [2008] No.3) in order to attract foreign equity investment capital and encourage the establishment by foreign investors of foreign-invested equity investment management enterprises in Pudong New Area.

Article 2: For the purposes of these Trial Measures, the term “foreign-invested equity investment management enterprise” means an enterprise invested in and established in Pudong New Area in the form of a Sino-foreign equity joint venture, Sino-foreign co-operative joint venture or wholly foreign-owned enterprise by a foreign company, enterprise, or other economic organisation or individual that, upon appointment by an equity investment enterprise, engages in equity investment management as its main business.

Article 3: To establish a foreign-invested equity investment management enterprise, the following conditions shall be satisfied:

(1) the foreign-invested equity investment management enterprise shall have at least one investor (shareholder) the scope of business of which, or the scope of business of an affiliate of which, covers equity investment or equity investment management business;

for the purposes of these Trial Measures, the term “affiliate” means an entity that controls or is controlled by, or under common control by another entity with, the investor; the term “control” means that the controlling party holds more than 50% of the voting rights in the controlled party;

(2) at the time of application for establishment, the foreign-invested equity investment management enterprise shall have at least two members of senior management personnel who satisfy both of the following conditions:

(a) having at least two years of experience in the equity investment or equity investment management business; and

(b) having at least two years of experience serving in a senior management position;

(3) a foreign-invested equity investment management enterprise shall be established in the form of a limited liability company. Its registered capital shall not be less than US$2 million, at least 20% of which shall be paid in within three months from the date of issuance of the business licence and the remainder of which shall be paid in, in full, within two years.

Article 4: The industry designator in the name of a foreign-invested equity investment management enterprise may be indicated as “equity investment management” and its scope of business shall be “engagement in investment management and related consulting service business upon appointment by an equity investment enterprise”. An existing foreign-invested enterprise that satisfies the conditions may be converted into a foreign-invested equity investment management enterprise.

Article 5: The establishment of or conversion into foreign-invested equity investment management enterprises shall be handled in accordance with current administrative examination and approval procedures of Pudong New Area. The Pudong New Area Economic Commission, Financial Service Office and the Pudong New Area Branch of the Shanghai Municipal Administration for Industry and Commerce shall be responsible for the examination and approval, registration, administration and monitoring of foreign-invested equity investment management enterprises in accordance with the law within their respective purviews.

Article 6: Business registration and tax registration by foreign-invested equity investment management enterprises in Pudong New Area during the year in question shall be handled with reference to relevant policies of the Pudong New Area, Implementing Measures for Promoting the Development of Equity Investment Enterprises and Equity Investment Management Enterprises (Hu Pu Fa Gai Jing Tiao [2008] No.784).

Article 7: The establishment of equity investment management enterprises in Pudong New Area by companies, enterprises, other economic organisations and individuals from Hong Kong, Macao and Taiwan shall, mutatis mutandis, be handled in accordance with these Trial Measures.

Article 8: These Trial Measures shall be effective as of the date of issuance until June 30 2010.