What matters should be paid attention to in equity transfer of foreign-funded enterprises

Problems needing attention in equity transfer of foreign-funded enterprises 1. The equity transfer of Chinese-foreign equity joint ventures and Chinese-foreign contractual joint ventures must be approved by all shareholders; 2, the transfer of foreign equity must be approved by the original examination and approval authority of the enterprise, and handle the industrial and commercial change registration; 3. Restrictions on transfer to third parties and conditions for transfer; 4. Pledge of shares with foreign investors' capital contribution not in place and restrictions on the transfer of pledged shares; 5. After partial transfer of foreign equity, the proportion of foreign equity shall not be less than 25%; 6. Transferee restrictions in the transfer of non-tradable shares of listed companies; 7. Restrictions on equity transfer of promoters of foreign-invested joint stock limited companies; 8. Legal issues that should be paid attention to in equity transfer of foreign-invested enterprises.

Legal basis:

1. According to Article 18 of China's Company Law, "This Law is applicable to foreign-invested limited liability companies, and if there are other provisions in the laws of Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises, such provisions shall prevail".

2. Article 20 of the Regulations for the Implementation of the Law on Chinese-foreign Joint Ventures stipulates that "if a joint venture transfers all or part of its shares to a third party, it must obtain the consent of the other party to the joint venture, report it to the examination and approval authority for approval, and go through the formalities of change registration with the registration authority.

3. According to "Several Provisions on Equity Change of Foreign-invested Enterprises", before foreign investment is in place, foreign investors may not pledge the undelivered shares; After the pledge, the pledgee may not transfer the pledged equity without the consent of the pledger and other investors of the enterprise; Without the consent of the pledgee, the pledgor investor may not transfer the pledged equity. At the same time, foreign investors' pledge of equity should also be approved by the original government examination and approval department, and they may not pledge equity without approval.

4. Article 5 of "Several Provisions on the Change of Investors' Equity in Foreign-invested Enterprises" stipulates that the change of enterprise investors' equity shall not lead to the contribution ratio of foreign investors being less than 25% of the registered capital of the enterprise unless the foreign investors transfer all their equity to China investors.

5. According to the Notice on Transferring State-owned Shares and Legal Person Shares of Listed Companies to Foreign Investors, the state-owned shares and legal person shares of listed companies transferred by foreign investors must be paid in full 1 year before they can be transferred according to law. The state-owned shares and legal person shares transferred by foreign investors are still non-tradable shares and cannot be listed and transferred on the exchange.

6. According to the Interim Provisions on Several Issues Concerning the Establishment of Foreign-invested Joint-stock Companies, if a foreign investor is the promoter of a foreign-invested joint-stock company, his foreign equity shall not be transferred within three years after the establishment of the company, and it must be approved by the original government examination and approval department.