Legislation roundup: Foreign-invested enterprises and investing with insurance proceeds
October 26, 2012 | BY
clpstaff &clp articles &The Ministry of Commerce has issued tentative provisions on equity investments for foreign-invested enterprises, while the China Insurance Regulatory Commission has opened up investment in financial products with insurance proceeds
Foreign investment
Ministry of Commerce, Tentative Provisions on Capital Contributions Made in the Form of Equity involving Foreign-invested Enterprises
商务部关于涉及外商投资企业股权出资的暂行规定
When a foreign investor uses its equity interests in a Chinese company to invest in another foreign-invested enterprise (FIE), the total amount of investment in the form of equity and non-monetary property in the FIE may not be more than 70% of the registered capital of the FIE.
Also, the equity of real property enterprises, foreign holding companies, foreign-invested venture capital investment enterprises and foreign-invested private equity enterprises is not allowed to be used for investment in another foreign-invested enterprise.
See full translation .
Further reading:
Measures for the Administration of Strategic Investments in Listed Companies by Foreign Investors, Feb 2006
Insurance
China Insurance Regulatory Commission, Circular on Investment in Relevant Financial Products with Insurance Proceeds
For the first time insurance proceeds are allowed to be invested in wealth management products of commercial banks, credit asset-backed securities of bank-type financial institutions and pooled trust plans of trust companies.
See full translation .
Further reading:
Insurance capital reform, Nov 2010
China Insurance Regulatory Commission, Implementing Rules for the Tentative Measures for the Administration of Overseas Investment of Insurance Proceeds
Insurance proceeds may now invest in 25 developed markets and 20 emerging markets. The amount allowed to be invested in emerging markets has also increased from not exceeding 5% of last year end's total assets to 10%. Investment instruments allowed include money market instruments, fixed-return instruments, equity, real property, investment funds and REITs.
See full translation .
Further reading:
Insurance capital reform, Nov 2010
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