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 境内企业家直接取得境外公司股票的几种方法 |
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kaffa
头衔: 海归中尉
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加入时间: 2005/06/15
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作者：kaffa 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Many wealthy entrepreneurs and individuals in China are increasingly interested in investing in foreign public companies, especially those that have substantial China operations or background. Regular procedures for outbound investment from China tend to be complex and time-consuming. This post discusses a number of easier methods that can enable such type of transactions.
I. PRIVATE OFFERING OF FOREIGN STOCK
Foreign firms may consider offering to Chinese individuals, on a private basis, stocks of foreign public companies. However, unlike Section 4(2) of the United States 1933 Securities Act and other rules that create safe harbors for private offering, there exists no clear exemption in China for non-public issuance of securities. ba<x>sed on relevant Chinese rules, if a party intends to offer investment instruments in China without approval of China Securities Regulatory Commission, it should not do any of the following:
-- public solicitation for the offering to the general mass through such means as advertisements, public notices, broadcasting, telephone calls, faxes, mailings, promotional conferences, Internet-ba<x>sed forums, text messages, etc;
-- receiving funds from over 200 subscribers, if its solicitation has targeted at a specific group of people;
-- promising to addressees guaranteed income from the investment; or
-- misrepresenting about facts or exaggerating financial prospects
In light of the above, it will be advisable for foreign firms’ promotional activities in China to be conducted as face-to-face in-person communications with selected small groups of wealthy people with whom the foreign firm’s representatives have pre-existing personal or business relationships. The number of attendees in any single event should be kept at lower than 200, and the foreign firm should candidly disclose to them potential financial risks associated with the investment instrument.
Furthermore, representatives of foreign firms can, as invitees, attend business events that meet the above requirements but have been organized by a third party. Such events are a another type of venue where in-person promotions can be done.
II. CROSS-BORDER SHARE SWAP
In the second method, a foreign public company may purchase a Chinese individual's equity interests in a China operating company, in return for which the Chinese individual will acquire shares in the foreign public company.
Cross-border share swap with a China-ba<x>sed company can take place when (i) shareholders of a foreign listed company use previously-outstanding shares in the company as consideration, or (ii) the foreign listed company uses its newly-issued shares as consideration, to acquire equity interests in a China-ba<x>sed company. That is, Chinese individuals that own equity in a local company can give away such equity to a foreign listed company in return for shares in the latter company. The Chinese individuals may acquire such shares either from the foreign listed company in the latter’s new shares issuance or from the company’s pre-existing shareholders.
The following requirements should be met for such share swap to take place:
-- The foreign company should be listed in a a well-established securities market (which is easy to comply).
-- The foreign company and its management should not be subject to any regulatory sanction during the past three years (easy to comply).
-- Shares in the foreign listed company should be transferable and tradable on a public securities market (other than the OTC BB-type of market) (again easy to comply);
-- Shares in the foreign listed company should not be subject to any dispute, lien, pledge or encumbrance (again easy to comply);
-- The price of the foreign listed company’s shares should have remained stable during the past year.
-- The proposed transaction price should comply with the outcome of a valuation conducted by an appraisal agency in China.
Besides, a foreign firm will want to note the following implicit issues:
(1) to start with, the foreign public company should not be a shell company; prior to the transaction, the public company should not be controlled by the shareholders of the Chinese company (otherwise the “round-trip investment” will trigger complicated regulatory issues);
(2) Prior to the share swap, the Chinese individual should own equity interests in a local company that has no foreign investment;
(3) Before closing the share swap, the Chinese company will have to go through a lengthy approval process in China: (i) first, application to the Chinese Ministry of Commerce (MOFCOM) for the share swap, (ii) registration with the State Administration of Commerce and State Administration of Foreign Exchange (SAFE), and (iii) application to MOFCOM and SAFE for outbound investment approval. Even after all the application documents are completed for submission, the aggregate waiting period for the regulatory clearance can last longer than 3 months.
For some foreign-listed public corporations that have substantial China background, the above is an effective way for them to expand exponentially by acquiring local smaller companies. During the periods when their stock prices keep rising, these corporations can easily use their stock as equivalent of “cash” to buy out owners of Chinese target companies in cross-border M&A deals.
III. ISSUANCE OF FOREIGN STOCK IN EXCHANGE FOR ONSHORE BUSINESS SERVICES
For a Chinese entrepreneur to own shares in a foreign company, the third possibility is for his or her Chinese enterprise to perform substantial business services for the foreign company in China, in return for which the foreign company issues new shares to the entrepreneur.
Under this method, a Chinese entrepreneur cause his or her wholly-owned local company to provide business services to the foreign company or its China subsidiary. While part of the consideration can go to the entrepreneur’s local company, the foreign company can also give consideration by issuing shares to the local company or the entrepreneur.
This method is possible only if the foreign company is incorporated in a jurisdiction where companies are allowed to issue shares in exchange for third parties' promises to provide service in the future. This is not the case in all major capital markets outside China, and is largely impossible in China except for a small number of "hi-tech parks".
Therefore, if the foreign company is incorporated in a place where such share-for-service arrangement is possible, it will be a good idea to have the relevant investment agreement governed by the law of that region. Besides, the agreement may provide that any dispute relating to the share issuance should be resolved in the foreign company’s home jurisdiction.
This method is relatively straightforward. No additional business vehicle needs to be set up, and it doesn't involve any cross-border capital flow. Its potential downside is tax-related. For example, to own stock in a US-incorporated corporation, the new shareholder may have to pay federal income tax on such equity acquisition through contribution of services.
For the earnings from such foreign stock ownership, the Chinese owner may have difficulty repatriating them back to China and converting them into RMB, as the local company did not go through the relevant regulatory procedure in China for outbound investment. However, this will not be a real issue if the Chinese owner will only spend such earnings abroad.
作者：kaffa 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 境内企业家直接取得境外公司股票的几种方法 -- kaffa - (7619 Byte) 2010-11-17 周三, 09:00 (1698 reads)
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