What is the legal framework for mergers and acquisitions of businesses in China?

The legal framework for mergers and acquisitions of businesses in China is governed by the China Business Ventures Law (CBVL). The aim of the CBVL is to facilitate the purchase and sale of Chinese businesses. The law covers both domestic and foreign companies in China. If a foreign company wishes to purchase a Chinese company, the foreign company must first obtain a legal entity registration from the Chinese government. Once this is done, the foreign company must then submit a written application to the Chinese Ministry of Commerce for approval. The Chinese government also sets a minimum shareholding requirement for foreign companies investing in Chinese companies. Generally, a foreign company must own at least 25% of the Chinese company’s voting shares in order to qualify as a shareholder. Under the CBVL, all mergers and acquisitions of Chinese companies must be registered with the Corporate Registration Office. Companies must adhere to the requirements of the CBVL or face legal consequences. The CBVL also stipulates that mergers and acquisitions must be in line with Chinese law and the policies of the Chinese government. For example, the law states that no mergers or acquisitions should be conducted in industries related to national security or cultural relics. In addition, the law sets out the legal and administrative procedures that must be followed when conducting mergers and acquisitions. These procedures must be followed to ensure that the transaction is legal and conducted in a fair and transparent manner.

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What is the legal framework for mergers and acquisitions of businesses in China?

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