Notice of the General Office of the People's Government of Guizhou Province on Issuing the Interim Measures for Implementing the Pilot Program for Foreign-invested Equity Investment Enterprises and the Operating Regulations of Guizhou Province on the Pilot Program for Foreign-invested Equity Investment Enterprises

· Document Number：No. 59 [2017] of the General Office of the People's Government of Guizhou Province

· Area of Law： Reform and Opening-up

· Level of Authority： Local Regulatory Documents

· Date issued：10-25-2017

· Effective Date：10-25-2017

· Status： Effective

· Issuing Authority： People's Government of Guizhou Province

Notice of the General Office of the People's Government of Guizhou Province on Issuing the Interim Measures for Implementing the Pilot Program for Foreign-invested Equity Investment Enterprises and the Operating Regulations of Guizhou Province on the Pilot Program for Foreign-invested Equity Investment Enterprises
(No. 59 [2017] of the General Office of the People's Government of Guizhou Province)
The people's governments of all cities and autonomous prefectures; the management committee of the Guian New District; the people's governments of all counties (cities, prefectures and special regions); and all departments under the provincial government and all institutions directly under the State Council:
With the consent of the provincial people's government, the Interim Measures of Guizhou Province for Implementing the Pilot Program for Foreign-invested Equity Investment Enterprises and the Operating Regulations of Guizhou Province on the Pilot Program for Foreign-invested Equity Investment Enterprises are hereby issued, for your diligent implementation and compliance in light of the reality.
General Office of the People's Government of Guizhou Province
October 25, 2017
Interim Measures for Implementing the Pilot Program for Foreign-invested Equity Investment Enterprises of Guizhou Province
Chapter I General Provisions
Article 1 For the purposes of implementing the spirit of the Official Reply of the State Council on Approving the Establishment of the Guizhou Inland Opening-up Pilot Economic Zone (Letter No. 142 [2016], State Council), the Notice of the National Development and Reform Commission on Issuing the Implementation Plan for the Construction of the Guizhou Inland Opening-up Pilot Economic Zone (No. 1836 [2016], NDRC), the Notice of the State Administration of Foreign Exchange on Issues concerning the Implementation of the Pilot Program of Reforming the Management Methods of Foreign Exchange Capital Fund Settlement of Foreign-funded Enterprises in Some Regions (No. 36 [2014], SAFE), the Official Reply of the State Administration of Foreign Exchange on Implementing the Pilot Program of Reforming the Administration of Foreign Exchange in Guiyang Free Trade Zone (Reply No. 129 [2014], SAFE) and other documents, and steadily promoting the construction of the Guizhou Inland Opening-up Pilot Economic Zone, these Measures are developed according to the relevant laws and regulations and by drawing lessons from the experience of relevant provinces, districts and cities in the pilot program for foreign-invested equity investment enterprises.
Article 2 Under the leadership of the Leading Group for the Construction of the Guizhou Inland Opening-up Pilot Economic Zone, a provincial work group for the pilot program for foreign-invested equity investment enterprises (hereinafter referred to as the “work group”) shall be formed. The relevant leaders of the provincial government shall serve as the group leader and the members shall be composed of the provincial development and reform commission (Office of the Leading Group for the Construction of the Guizhou Inland Opening-up Pilot Economic Zone), the provincial department of commerce, the provincial administration for industry and commerce, the provincial department of finance, the financial service office of the provincial government, the legal affairs office of the provincial government, the provincial local tax bureau, the provincial office of the State Administration of Taxation, the Guiyang Central Sub-branch of the People's Bank of China, the Guizhou Branch of the State Administration of Foreign Exchange (“SAFE”), Guizhou Office of the China Banking Regulatory Commission, Guizhou Office of the China Securities Regulatory Commission, the Guiyang Municipal People's Government and other entities.
The work group shall be responsible for examining the applications for the formation of foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises, deliberating the major policies and matters on the pilot program for foreign-invested equity investment enterprises, coordinating with and solving the major problems during the process of the pilot program, and organizing and coordinating with the development and implementation of the various policies and measures for the pilot program by the member entities and the relevant departments, and promoting the orderly implementation of the pilot program. The member entities of the work group shall, according to their respective functions and duties, manage the pilot program and the enterprises implementing the pilot program. The office of the work group shall be set up in the provincial development and reform commission (Office of the Leading Group for the Construction of the Guizhou Inland Opening-up Pilot Economic Zone).
Article 3 For the purpose of these Measures, “foreign-funded equity investment enterprises” means enterprises that are legally invested and formed by overseas enterprises or individuals with the approval and consent of the work group and that invest in enterprises' non-publicly traded equity.
For the purpose of these Measures, “foreign-funded equity investment management enterprise” means enterprises that are legally invested and formed by overseas enterprises or individuals with the approval and consent of the work group and that mainly engage in the formation of equity investment enterprises or entrusted management of equity investment enterprises.
For the purpose of these Measures, “enterprises implementing the pilot program” means the foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises approved by the work group.
Foreign-funded equity investment enterprises may adopt the organizational form of partnership, and foreign-funded equity investment management enterprises may adopt the organizational forms of partnership and corporate system.
Article 4 The pilot program for foreign-invested equity investment enterprises shall be conducted first in Guiyang Free Trade Zone. The domiciles (business premises) of the enterprises implementing the pilot program approved by the work group to be formed during the period of the pilot program shall be located in Guiyang Free Trade Zone.
Chapter II Application for Formation
Article 5 The subscribed capital contribution of a foreign-funded equity investment enterprise shall not be lower than the money equivalent of USD15 million, and the form of capital contribution shall be limited to currency. Partners shall make capital contributions in their own names, and the capital contribution of each limited partner other than general partners shall not be lower than the moneyequivalent of USD1 million.
The registered capital (or subscribed capital contribution) of a foreign-funded equity investment management enterprise shall not be lower than the money equivalent of USD1.5 million, and the form of capital contribution shall be limited to currency. Not less than 20% of the registered capital (or subscribed capital contribution) shall be paid up within three months of the date of issuance of the business license, and the remaining part shall be paid up in full within two years of the date of formation of the enterprise.
Article 6 When filing for application, a foreign-funded equity investment management enterprise shall have at least two senior executives concurrently meeting the following conditions:
(1) They have more than five years of experience in equity investment or equity investment management.
(2) They have more than two years of experience of assuming the post of senior executive.
(3) They shall have experience in making equity investment relevant to China or practicing experience in Chinese financial institutions.
(4) They shall have no record of any violation of regulation or any pending economic lawsuits in the latest five years and have sound personal credit record.
For the purpose of these Measures, “senior executives” means managers at or above the deputy general manager or an equivalent level.
Article 7 To apply for participating in the pilot program, an overseas investor shall meet the following conditions:
(1) It has a sound governance structure and perfect internal control rules and has not been subject to any punishment by the judicial authorities and relevant regulatory authorities in the past two years.
(2) The overseas investor or its affiliate has relevant investment experience.
(3) It shall be mainly composed of overseas sovereign wealth funds, pension funds, donation funds, charity funds, fund of investment funds (FOF), insurance companies, banks, securities companies and other overseas institutional investors recognized by the work group.
(4) Other conditions required to be met for the pilot program.
Article 8 Chinese investors applying for participating in the pilot program shall comply with the relevant provisions of the laws and regulations of China currently in force.
Chapter III Operation of the Pilot Program
Article 9 An enterprise applying for participating in the pilot program shall, through the executive partner of the foreign-funded equity investment enterprise or equity investment enterprise intended to be formed, file an application for the pilot program with the office of the work group, and the office of the work group shall submit it to the work group for examination after preliminary review.
Article 10 The foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises approved by the work group shall, according to the relevant laws and regulations, undergo the relevant formalities of approval and recordation (required to be undergone for enterprises under the corporate system), industrial and commercial registration and fund recordation, among others, with the department of commerce, and carry out business according to the laws and regulations.
Article 11 The foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises approved by the work group may add “equity investment fund” and “equity investment fund management” to their names. Except enterprises implementing the pilot program, other foreign-funded enterprises shall not use “equity investment fund” or “equity investment fund management” in their names.
Article 12 A foreign-funded equity investment enterprise may engage in the following business:
(1) It may make equity investment with all its own funds within the scope permitted by the state by investment means permitted by the laws and regulations issued by the state, such as forming a new enterprise, investing in an established enterprise, and acquiring equities transferred by investors of an established enterprise.
(2) It may provide management consultation for the investees.
(3) Other relevant business for which the approval and recordation formalities have been undergone or that have been permitted by the registration authority.
Article 13 A foreign-funded equity investment management enterprise may engage in the following business:
(1) Forming equity investment enterprises.
(2) Managing the investment business of equity investment enterprises upon entrustment and providing the relevant services.
(3) Providing equity investment consultation.
(4) Other relevant business for which the approval and recordation formalities have been undergone or that have been permitted by the registration authority.
Article 14 Foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises shall carry out business within the scope permitted by the laws and regulations issued by the state, and shall not engage in the following business:
(1) investing in a field where foreign investment is prohibited;
(2) trading stock on the secondary market, except shares held by foreign-funded equity investment enterprises in investees that are later listed;
(3) trading financial derivatives;
(4) investing in real estate not for its own use;
(5) providing loans or security for other persons;
(6) making investment by misappropriating funds of others; and
(7) other matters prohibited to be engaged in by foreign-funded equity investment enterprises.
Article 15 Foreign-funded equity investment enterprises shall diligently implement the provisions of the Measures for the Recordation of Management Institutions of Privately Offered Investment Funds and Funds (for Trial Implementation).
Article 16 A foreign investor shall make capital contribution in convertible currency, with cross-border RMB, RMB profits obtained within the territory of China or lawful RMB proceeds obtained from share transfer, liquidation and other activities, while a Chinese investor shall make capital contribution in RMB.
Article 17 An enterprise implementing the pilot program shall entrust a qualified bank in the province as the fund custodian bank. The custodian bank shall, according to the agreement, be responsible for supervising the investment operation of the enterprises implementing the pilot program for foreign-invested equity investment enterprises, and administer the fund custody accounts and the use of funds in the accounts according to the relevant provisions.
Article 18 An enterprise implementing the pilot program may allocate profits and withdraw capital according to the articles of association of the company or the partnership agreement.
Chapter IV Supervision and Management
Article 19 The work group shall be responsible for the supervision and management of the pilot program, and the relevant member entities shall be responsible for the relevant supervision and management according to their respective functions.
Article 20 An enterprise implementing the pilot program shall report the major matters about the operation activities in a half year to the office of the work group every half year, including but not limited to:
(1) the equity investment and other operation activities;
(2) the availability of capital and the important financial status;
(3) the changes in the articles of association (contracts) or partnership agreements and other important legal documents;
(4) the changes in the directors and senior executives;
(5) the increase or decrease in the total amount of investment, registered capital, and subscribed capital contribution;
(6) the split-up and merger;
(7) the dissolution, liquidation or bankruptcy; and
(8) other matters required by the office of the work group.
Article 21 A custodian bank shall fulfill the functions, including but not limited to:
(1) After the end of a year, it shall submit the annual report on the operation of capital and equity investment of the enterprise implementing the pilot program in the previous year to the office of the work group.
(2) It shall supervise the fund operation of the enterprise implementing the pilot program, do not implement those violating the laws and regulations issued by the state or the custody agreement, and immediately report to the office of the work group.
(3) It shall handle the registration of foreign exchange and foreign exchange settlement and sale of the enterprises implementing the pilot program according to the relevant provisions on the foreign exchange administration, and submit the relevant data through the system in a timely manner.
(4) Other supervision matters as specified by the work group.
Article 22 Where a foreign-funded equity investment enterprise handles the following matters, the provincial administration for industry and commerce shall solicit the opinions of the office of the work group in advance:
(1) the change of the scope of business;
(2) the change of the partners;
(3) the increase or decrease in the amount of subscribed capital contribution, the increase or decrease in the amount of capital contribution actually paid up, and the change in the time limit for payment; and
(4) the change of the type of the partnership enterprise.
Article 23 When an enterprise implementing the pilot program undergoes the formalities of cancellation, the provincial administration for industry and commerce shall notify the office of the work group.
Article 24 The work group and member entities may, on a regular or irregular basis, understand the operations and existing problems of the enterprises implementing the pilot program by letter, telephone, meeting, on-site investigation, inquiry into the custodian bank, etc., and study and adopt corresponding measures to solve the problems.
Article 25 Where an enterprise implementing the pilot program violates the provisions of these Measures and is verified by the relevant department, the work group shall order it to make rectification within 30 working days; where no corrective action has been taken within the prescribed time limit, the enterprise shall be disqualified from implementing the pilot program, upon verification and with consent of the work group; and where a crime is constituted, the violator shall be transferred to the judicial organ to be prosecuted for criminal liability.
Chapter V Supplementary Provisions
Article 26 These Measures shall apply, mutatis mutandis to, investors from the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region that invest in and form equity investment enterprises and equity investment management enterprises in Guizhou Province.
Article 27 The power to interpret these Measures shall remain with the office of the work group.
Article 28 These Measures shall come into force on the date of issuance.
Operating Regulations of Guizhou Province on the Pilot Program for Foreign-invested Equity Investment Enterprises
Article 1 For the purpose of regulating the pilot program for foreign-invested equity investment enterprises in Guizhou province, these Operating Regulations are developed in accordance with the Interim Measures of Guizhou Province for Implementing the Pilot Program for Foreign-invested Equity Investment Enterprises (hereinafter referred to as the “Interim Measures”).
Article 2 The provincial work group for the pilot program for foreign-invested equity investment enterprises (hereinafter referred to as the “work group”) shall be responsible for organizing and leading the pilot program, examining the applications for the formation of foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises, deliberating the major policies and matters on the pilot program for foreign-invested equity investment enterprises, coordinating with and solving the major problems during the process of the pilot program, organizing and coordinating with the development and implementation of the various policies and measures for the pilot program by the member entities and the relevant departments, and promoting the orderly implementation of the pilot program. The office of the work group shall be set up in the provincial development and reform commission (Office of the Leading Group for the Construction of the Guizhou Inland Opening-up Pilot Economic Zone).
The provincial department of commerce shall be responsible for approving the formation of foreign-funded equity investment management enterprises under the corporate system, and supervise and manage the enterprises implementing the pilot program according to its functions. The financial service office of the provincial government shall be responsible for examining the qualifications of the investment enterprises implementing the pilot program and the qualifications of senior executives, and supervise and manage the enterprises implementing the pilot program according to its functions. The provincial administration for industry and commerce shall be responsible for undergoing the industrial and commercial registration formalities for the enterprises implementing the pilot program, examine and approve the approval documents on the major changes in enterprises in accordance with the Interim Measures, and supervise and manage the enterprises implementing the pilot program according to its functions. The Guiyang Central Sub-branch of the People's Bank of China and the Guizhou Branch of the State Administration of Foreign Exchange shall be responsible for effectively managing the RMB and foreign exchange quotas, and RMB and foreign exchange payment of enterprises implementing the pilot program according to the cross-border RMB policies and the foreign exchange management policies of the state, and supervise and manage the enterprises implementing the pilot program according to their functions. The Guizhou Office of the China Banking Regulatory Commission shall be responsible for the supervision and management of the custodian banks. The Guizhou Office of the China Securities Regulatory Commission shall, in accordance with the relevant provisions on the management of private equity funds, direct enterprises implementing the pilot program to regulate their operations, and supervise and manage the enterprises implementing the pilot program according to its functions. Other member entities of the work group shall promote the pilot work according to their respective functions, and manage the enterprises implementing the pilot program.
Article 3 The office of the work group shall be responsible for the following routine work:
(1) It shall accept the applications of enterprise implementing the pilot program and organize the examination and approval, and issue the examination and approval opinions on the formation of foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises.
(2) It shall be responsible for organizing the recordation management of the approved enterprises implementing the pilot program.
(3) It shall accept the applications of the custodian banks implementing the pilot program and organize the examination and approval thereof.
(4) It shall organize the development of the policies and work rules on the pilot program for foreign-invested equity investment enterprises, and promote the implementation thereof upon approval of the work group.
(5) It shall supervise and manage the enterprises implementing the pilot program, and urge the enterprises implementing the pilot program to submit reports on a regular basis; and collect and review the progress and existing problems of the pilot program, coordinate with the relevant departments to study and solve the problems, and submit the major problems to the work group for deliberation.
Article 4 An enterprise applying for participating in the pilot program shall, through the executive partner of the foreign-funded equity investment enterprise or equity investment enterprise intended to be formed, file an application for the pilot program with the office of the work group, and the office of the work group shall submit it to the work group for examination after preliminary review. The application materials shall include:
(1) the application for a pilot program;
(2) the written certification materials required by the Interim Measures;
(3) the materials on the equity investment enterprise that is intended to be formed submitted by the foreign-funded equity investment enterprise filing an application, including the prospectus, partnership agreement, photocopy of the business license of institutional investor, and the relevant documents concluded with the custodian bank;
(4) the letter of commitment on the authenticity of the submitted materials issued by the applicant; and
(5) other materials required by the work group.
Article 5 The office of the work group shall decide whether to accept the application within 5 working days of the date of receiving all the application documents of the enterprise; and shall convene the member entities of the work group for review within 10 working days after acceptance. Where the requirements for the pilot program are satisfied upon review and the work group has granted approval and consent thereto, the office of the work group shall notify the applicant in writing, and submit copies to the member entities of the work group and the custodian bank of the enterprise implementing the pilot program; and where review is not passed, the office of the work group shall notify the applicant in writing.
Article 6 Foreign-funded equity investment enterprises and foreign-funded equity investment management enterprises permitted to implement the pilot program shall, within three months of the date of approval, undergo the formalities of recordation approval and registration at the comprehensive service window for foreign-funded enterprises set up by the government affairs service center of the provincial government in accordance with the provisions of the Notice of the Guizhou Administration for Industry and Commerce and the Guizhou Department of Commerce on Issuing the Implementation Plan for Promoting the Rules on “One-window Acceptance” of Applications for the Formation of Foreign-funded Enterprises (No. 2 [2017], Guizhou Administration for Industry and Commerce).
Article 7 An enterprise implementing the pilot program that has undergone the formalities of industrial and commercial registration shall, according to the difference in the investment currencies, directly undergo the relevant registration formalities at the designated foreign exchange bank.
Article 8 A foreign-funded equity investment enterprise shall entrust a qualified bank in this province as its capital custodian.
Article 9 A bank applying for the custody business of an enterprise implementing the pilot program shall file an application with the office of the work group and submit the application materials including:
(1) an application for the pilot program (including: the certifications on the qualification of the designated foreign exchange bank, qualification for engaging in RMB business and qualification of securities investment fund custody business, whether there are sound internal auditing and monitoring rules and risk control rules, assessment rating for the implementation of the provisions on foreign exchange administration in the previous year is B or above and other relevant materials);
(2) a project plan (including: the contents of services under custody, preferential items, value-added services and experience in the raising and custody of equity investment funds, among others, of the enterprise implementing the pilot program); and
(3) other materials required by the work group.
Article 10 An application for a custodian bank implementing the pilot program shall be handled according to the following procedures: The office of the work group shall decide whether to accept the application within 5 working days of the date of receiving all the application documents of the bank; and shall convene the member entities of the work group for review within 10 working days after acceptance. Where the requirements for the pilot program are satisfied upon review and the work group has granted approval and consent thereto, the office of the work group shall notify the applicant in writing, and submit copies to the member entities of the work group; and where review is not passed, the office of the work group shall notify the applicant in writing.
The bank entrusted by a foreign-funded equity investment enterprise shall submit the relevant custody rules to the relevant department for recordation.
Article 11 The management committee of Guiyang Free Trade Zone shall actively coordinate with the enterprises implementing the pilot program, promote the relevant work of the pilot program, coordinate with all member entities of the work group to conduct investigation of the enterprises implementing the pilot program, assist all member entities of the work group in supervising and managing the enterprises implementing the pilot program, strengthen the routine services and management of the enterprises implementing the pilot program, and report the problems found to the work group and the relevant departments in a timely manner.
Article 12 To improve the work efficiency, all member entities of the work group shall designate special institutions and special persons to be in charge, simplify the examination process, and ensure that the pilot program is conducted in an efficient, orderly and regulated manner.
Article 13 These Regulations shall come into force on the date of issuance. Problems found during the process of implementation shall be reported to the office of the work group in a timely manner.