What is the legal process for setting up a venture capital fund in China?

Setting up a venture capital fund in China involves a set of distinct legal procedures. Typically, companies must register with the local Administration of Industry and Commerce (AIC) and the central bank, the People’s Bank of China (PBOC). The registration process includes providing details such as fund size, operating periods, and type of fund program. Additionally, any company intent on operating a venture capital fund must negotiate a number of legal documents, such as the Articles of Association or Partnership Agreement. In addition to the AIC and PBOC registration, venture funds must be approved by the China Securities Regulatory Commission (CSRC). The application process includes providing the CSRC with detailed information such as capital structure, management system, and investment and asset management strategy. Once the application is approved, venture capital funds can commence their operations. To manage the fund on a daily basis, companies are required to obtain a license from the China Banking Regulatory Commission (CBRC) to establish a fund management company, which is responsible for the daily operations of the venture capital fund. The CBRC requires prospective investors to demonstrate sufficient financial resources, professional qualifications and good financial standing. Once a venture fund is set up, the fund must meet certain disclosure and reporting obligations according to Chinese laws and regulations. Companies must also abide by the provisions of the Company Law, Securities Law, and other relevant laws, which cover areas such as corporate governance, capital investment, and financial activities. Meeting these requirements is essential in order to operate a venture capital fund in China.

What is the legal process for setting up a venture capital fund in China?

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