Domestic oversight of foreign acquisitions by listed companies

In 2016, direct foreign non-finance investment by Chinese enterprises reached US$170 billion, with listed companies becoming the central force in foreign acquisitions. However, as compared to other enterprises, listed companies face more complex approval procedures for their foreign acquisitions.

State-owned asset authority approval. If a listed company is a state-owned enterprise (SOE), it first needs to secure the approval of the state-owned asset authority in accordance with the Law on the State-Owned Assets of Enterprises and the Interim Regulations for the Oversight of the State-Owned Assets of Enterprises.

Project approval. Pursuant to the Administrative Measures for the Approval and Recordal of Offshore Investment Projects (Orders No. 9 and 20 of the National Development and Reform Commission [NDRC]), offshore investment projects in sensitive countries and regions, and in sensitive industries, as well as offshore investment projects in which the Chinese party’s investment totals at least US$2 billion, are subject to the NDRC’s approval. Offshore investment projects other than those mentioned above are subject to administration by way of recordal. Of those, projects with an investment by the Chinese party of at least US$300 million, implemented by an enterprise under the administration of the central government or a local enterprise, are subject to recordal by the NDRC. Others are subject to recordal by the investment authority of the provincial-level government.