GUIDE TO MERGER AND ACQUISITION IN CHINA 2006
CONTENTS
CHAPTER 1 BUSINESS SCOPES AND FOREIGN INVESTMENT INDUSTRIAL GUIDANCE
CATALOGUE..................................................................................................................................2
CHAPTER 2 APPROVALS OF ESTABLISHEMENT OF FOREIGN-INVESTED
ENTERPRISES (“FIEs”)..................................................................................................................3
CHAPTER 3 THE FOREIGN INVESTMENT ESTABLISHMENTS IN CHINA..........................4
Sino-Foreign Joint Ventures......................................................................................................4
Wholly Foreign-Owned Enterprises .........................................................................................5
Foreign-Invested Joint Stock Limited Companies ....................................................................6
Holding Company.....................................................................................................................6
Representative Offices ..............................................................................................................7
CHAPTER 4 TYPES OF MERGER AND ACQUISITION TRANSACTION................................8
Equity Acquisition....................................................................................................................8
Asset Acquisition ......................................................................................................................9
Mergers ..................................................................................................................................11
Offshore Acquisition ...............................................................................................................12
CHAPER 5 APPRAISAL AND CONSIDERATION .....................................................................13
CHAPER 6 REGULATORY APPROVAL PROCESSES FOR ACQUISITION............................14
General Approval ....................................................................................................................14
Antitrust Approval...................................................................................................................18
Miscellaneous Review/ Approval ...........................................................................................21
CHAPTER 7 FOREIGN EXCHANGE CONTROL ......................................................................24
CHAPTER 8 TAXES ISSUES.....................................................................................................25
Enterprise Income Tax ............................................................................................................25
Value Added Tax (“VAT”).......................................................................................................26
Business Tax ...........................................................................................................................27
Stamp Duties ...........................................................................................................................27
Deed Tax ................................................................................................................................27
Custom Duties.........................................................................................................................27
Land Appreciation Tax............................................................................................................28
Tax Considerations in a Merger and Acquisition Transaction.................................................28
Equity Acquisition...........................................................................................................28
Asset Acquisition ............................................................................................................29
Merger............................................................................................................................29
CHAPTER 9 EMPLOYMENT ISSUES......................................................................................30
CHAPTER 10 LATEST DEVELOPMENT.................................................................................32
CONCLUSION..............................................................................................................................35