To: Foreign economic and trade commission(department) in every province、autonomous region、municipality directly under the Central Government and city independently listed on the state plan
With a view to standardizing the activities of the public listing of foreign invested companies by shares, we hereby issue this circular as follows:
1.the establishment of a foreign invested company limited by shares or application for the conversion of an existing foreign invested Limited company into a foreign invested company limited by shares must firstly comply with the requirements of "Interim Regulations on Certain Issues concerning the Establishment of the Foreign Invested Company Limited by Shares" and must apply for the examination and approval from MOFTEC according to the regulated procedures.
2. In the event an existing foreign invested company limited by shares applys for public listing of A Shares or B Shares, it must obtain the written approval from MOFTEC and satisfy with the following conditions:
(a) The foreign invested companies limited by share must, at the time such company is applying for a public listing or after such company has been listed, be in line with the Industry Policy for Foreign Investment;
(b) The foreign invested companies limited by shares who are applying for a public listing must be enterprises who have been established or reformed in accordance with relevant regulations and procedures;
(c) The non-listed foreign capital shares in a publicly listed foreign invested companies limited by share shall account for not less than 25% of the total stock;
(d) Complying with other provisions which may be required by the relevant laws and regulations concerning a listed company.
3. The application for public listing its "non-listed foreign capital stock" made by a Chinese-foreign equity joint venture who holds B shares should, after obtaining the written consent from MOFTEC, submit an applying plan for public listing its "non-listed foreign capital stock" prepared in accordance with the requirements of " The Notice on Issues concerning Listing and Circulating of the "non-listed foreign capital stock" Domestic Listed Companies (B shares)" to CSRC. To apply for listing and circulation of the "non-listed foreign capital stock", the following conditions must be satisfied:
(a) After having issued B Shares, the non-listed foreign capital shares held by a Sino-foreign invested companies limited by shares shall account for not less than 25% of the total stock;
(b) the non-listed foreign capital shares, which are planed to be listed, shall have maintained in existence for more than one year;
(c) After the non-listed foreign capital shares have been changed into circulating stocks, the successors shall be committed to perform the obligations and responsibilities of the former holders of the non-listed foreign capital shares as provided in the companies' articles of association;
(d) Complying with other provisions required by the relevant laws and regulations concerning listed companies.
The non-listed foreign capital shares held by an investment company with foreign investment shall not be changed into circulating stocks at present.
The above mentioned is required to be obeyed and performed.
Promulgated as this 17th day of May, 2001
This translation, together with any explanatory material, is provided courtesy of Lehman Tax & Accounting.