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Q：
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What are the requirements for foreign investors to make strategic investment in listed companies with their shares of overseas companies?
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A：
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Where a foreign investor makes a strategic investment in a listed company by using the equity it holds in an overseas company or the additional shares it issues as a means of payment, the following conditions shall be met:
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The overseas company is lawfully established, with a complete corporate legal system in its registered location, and neither the overseas company nor its management has received any major penalties from domestic or foreign regulatory authorities in the past three years; Where strategic investment is implemented through the method of agreement transfer, the overseas company shall be a listed company;
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Foreign investors legally hold equity in overseas companies and it is legally transferable, or foreign investors legally issue additional shares;
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Comply with the Securities Law of the People's Republic of China, the Company Law of the People's Republic of China, and the relevant regulations of The State Council, the securities regulatory authority of The State Council, the stock exchange, and the securities registration and settlement institution;
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Comply with the relevant regulations of the state on the management of foreign investment and complete the relevant procedures.
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Q：
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Do foreign investors need to hire advisors when making strategic investments?
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A：
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When foreign investors make strategic investments, the foreign investors and listed companies shall engage financial advisory institutions, sponsor institutions or law firms registered in China and in compliance with the provisions of the Securities Law of the People's Republic of China as advisors.
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Q：
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What restrictions are there on the transfer of shares of listed companies obtained by foreign investors through strategic investment?
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A：
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The A-share stocks of listed companies obtained by foreign investors through strategic investment shall not be transferred within 12 months.
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Q：
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How can strategic investment be implemented through the method of targeted issuance of new shares?
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A：
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When strategic investment is implemented through the targeted issuance of new shares by listed companies, foreign investors can subscribe for new shares as the issuance targets determined in advance by the board of directors of the listed company, or as the issuance targets determined through competitive bidding.
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Q：
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What procedures should be followed for foreign investors to subscribe for new shares as the issuance targets determined in advance by the board of directors of listed companies?
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A：
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When foreign investors subscribe for new shares as the issuance targets determined in advance by the board of directors of a listed company, the strategic investment shall be handled in accordance with the following procedures:
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Listed companies sign contracts for targeted issuance with foreign investors;
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The board of directors of the listed company passes the relevant resolution on the targeted issuance of new shares to foreign investors and discloses whether this strategic investment meets the prescribed conditions;
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The shareholders' meeting of the listed company passed the relevant resolution on the targeted issuance of new shares to foreign investors;
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Listed companies shall go through the registration procedures in accordance with the regulations of the securities regulatory authority under The State Council and the stock exchange and obtain the registration decision;
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The listed company applies to the securities registration and settlement institution for share registration procedures;
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Foreign investors or listed companies shall submit investment information to the competent commercial authorities after the listed company has completed the targeted issuance.
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FAQ
