For nearly three years now, the Chinese government has been issuing new policies regarding the use of offshore entities to acquire domestic operations. On May 29, 2007 the PRC State Administration of Foreign Exchange released Implementation Notice No. 106 which clarifies many of the earlier rules and appears to be a tightening of policy. Purchase this webinar archive to learn about the impact this will have on cross-border transactions, the challenges ahead and solutions that will still allow U.S. investment into Chinese companies.

The Chinese government has been issuing new rules and clarifications for the last three years making it increasingly more difficult to understand the regulations of doing business in China. Lawyers and promoters have continued to craft creative ways around the regulations, but the policies remain complex. This section gives an overview of the initial rules while focusing on the latest Implementation Notice No. 106, and the apparent tightening of the rules.

Rule clarifications in China have typically softened the original document, but Notice 106 works instead to tighten up the policy. What does this mean for the structure of transactions? This presentation focuses on the challenges that foreign investors face in seeking to structure cross-border deals and explores what the impact may be on the future.

At first glance it would seem that these new regulations along with new M&A rules could put a stop to Chinese reverse mergers. Innovative structures will be necessary to continue U.S. investment in Chinese companies. In this section, panelists discuss their solutions for compliance with Implementation Notice No. 106.

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