China finalizes rules for contributions of Chinese equity interests to foreign invested enterprises

Asia-Pacific Tax Newsalert

The Chinese Ministry of Commerce recently promulgated final regulations regarding capital contributions of equity interests in Chinese companies to foreign-invested enterprises (FIEs). The provisions of this decree, commonly known as Decree 8, were effective on October 22.

Decree 8 allows foreign investors to restructure their existing holding structures through equity contributions. Decree 8 also provides a legal framework for domestic investors to participate in FIE projects by investing through equity contributions.

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