Chapter 1 The History of Foreign Investment in China From Reform and Opening to the Xi Jinping Administration 1
Ⅰ．The First Decade：Early Experimentation and the Basic Foreign Investment Vehicles 4
a．Sino-foreign Equity Joint Ventures 4
b．Cooperative Joint Ventures and Wholly Foreign-Owned Enterprises 9
Ⅱ．The Second Decade：From Deng Xiaoping's"Southern Tour"to the WTO 12
a．Deng's"Southern Tour"and major new legislation 12
b．Taxation and preferential treatment for foreign investment 15
c．The pilot BOT projects：international project finance comes to China 17
d．Taking security 28
e．Foreign Invested Companies Limited by Shares 32
f．Foreign Investment Guidance Catalogue 34
g．Keeping it in China：holding companies,FIE reinvestment and FIE M＆A 36
h．The PRC Contract Law 46
Ⅲ．The Third Decade：From the WTO to the Global Economic Crisis and its Aftermath 49
a．China's WTO accession 49
b．Reform of the foreign investment approval system 51
c．Buying into China：the door to M＆A opens 53
d．Foreign M＆A and state-owned assets 59
e．Foreign Invested Commercial Enterprises and the long-awaited opening of the retail sector 61
f．The Anti-Monopoly Law：Beijing joins Washington and Brussels as the third major competition regulator 65
g．The global economic crisis and the devolution of approval authority 68
h．Chinaintroduces a national security review for foreign M＆A transactions 73
i．From separate and not equal towards a commonlegal regime for domestic and foreign investment 76
j．Reforms under the Xi Jinping Administration：dawn of a new era？ 80
k．Overall trends and considerations 91
Chapter 2 Coming to China：The Initial Client Meeting Categorization of Foreign Investment and the Government Approval Process 95
Ⅰ．Overall framework：guiding foreign investment in line with PRC government macro economic planning 100
a．Foreign Investment Industrial Guidance Catalogue 100
b．The main categories and contents of the Guidance Catalogue 106
Ⅱ．The Guidance Catalogue and the Company's Business Scope 114
a．Operating within the business scope 114
Ⅲ．Approval Process for Foreign Investment 118
a．中华人民共和国国家发展和改革委员会 121
b．中华人民共和国商务部 130
c．中华人民共和国国家工商行政管理总局 142
d．Shanghai Pilot Free Trade Zone 145
Chapter 3 Establishing a Presence in the PRC：Investment Vehicles Available to Foreign Investors 151
Ⅰ．Establishing a Permanent Presence in China 155
a．Representative offices of foreign companies 155
b．Recent developments and trends for rep offices 160
c．The special case of representative offices of foreign law firms 164
Ⅱ．The Three Basic Foreign Investment Enterprises：Equity Joint ventures,Cooperative Joint Ventures and Wholly Foreign-Owned Enterprises 173
a．General aspects of FIEs 173
b．Common characteristics of joint ventures and WFOEs 177
c．Distinctive features of Equity Joint Ventures vs Cooperative Joint Ventures 187
d．Establishing a CJV 192
e．Special provisions for non-legal person CJVs 195
f．Wholly-Foreign Owned Enterprises 198
Ⅲ．外商投资性公司 206
a．Registered capital and total investment amount of holding companies 208
b．Operations and activities of holding companies 210
Ⅳ．Foreign Invested Companies Limited by Shares 214
Ⅴ．Foreign Invested Commercial Enterprises 219
Ⅵ．Foreign Invested Research and Development Centers 221
Ⅶ．Regional Headquarters 226
Ⅷ．Foreign Invested Partnership Enterprises 229
Ⅸ．Variable Interest Entities（VIEs） 234
Chapter 4 Operating a Foreign Invested Enterprise 247
Ⅰ．Establishing a FIE：initial registrations and procedures 250
Ⅱ．Capital structure：Registered Capitaland Total Investment Amount 255
a．2014 changes to the capitalization process rules 255
b．What can be contributed as registered capital 263
Ⅲ．Running the Company：Who's the boss？ 267
a．The role and authority of the Legal Representative 267
b．Signatures and chops,and the question of deemed authority 276
c．Functioning of the board of directors and the board of supervisors 283
Ⅳ．Legal liability of the legal representative and other key personnel 287
a．Potential criminal liability 287
b．Restrictions on leaving China 296
c．Responsibilities of share holders 299
Ⅴ．Protections for Legal Representative and other key personnel 300
a．The“business judgment rule”and contract-based protections 300
b．Directors'and officers'liability insurance 303
Ⅵ．Labor and employment,Unions and the Party 305
a．Employing PRC and expatriate staff 306
b．Social Security System for Employees（including foreign employees） 312
c．Trade unions and Party organizations 313
Ⅶ．Annual audits and reporting obligations for FIEs 316
Ⅷ．Technology and Trademark License Agreements 320
a．Technology License Agreements 320
b．Trademarks and Trade Names 326
Ⅸ．Due Diligence,Language and Compliance 330
Chapter 5 Expanding in China：FIE and Foreign M＆A Transactions 336
Ⅰ．M＆A Transactions Involving Existing FIEs 341
a．FIE reinvestment within China 341
b．FIE Changes in Equity Rules 344
c．FIE Mergers and Divisions 351
Ⅱ．Foreign M＆A Transactions 355
a．The M＆A Regulations 355
b．Due diligence and representations＆warranties 360
c．The payment price and property rights exchange institutions 364
d．The approval process for M＆A transactions 371
e．Share swaps 380
f．Special purpose vehicles 385
g．Relationship with FIE M＆A 386
h．Asset vs.equity deals 387
Ⅲ．The Anti-Monopoly Law：China Becomes a Major Competition Regulator 389
a．Background and general objectives 389
b．Concentration of business operators 395
c．Merger review process 398
Ⅳ．National Security Review 406
a．General principles 406
b．Procedure and requirements fornational security review 410
Ⅴ．Strategic Investment in Listed Companies 416
Chapter 6 Building the Project：Land,Bidding,and Taking Security 423
Ⅰ．Regulation of Land Use in China 426
a．Basic system 426
b．Purchase of PRC real estate by foreign individuals and institutions 434
c．Foreign Invested Real Estate Enterprises 435
Ⅱ．Bidding and Tendering 436
a．The Bidding Law 436
b．Electronic bidding 447
Ⅲ．Rules onthe Creation,Perfection and Enforcement of Secured Interests 454
a．General principles 454
b．Mortgages 457
c．Pledges 465
d．Guarantees 468
e．Special rules on security provided to foreign entities 472
Appendix 1 Development of the Legal Profession and Professional Legal Education in China 478
Ⅰ．Opportunities for and role of business lawyers in China 479
Ⅱ．System of Legal Education in China 484
Ⅲ．Foreign and Foreign-style Legal Education in China 488
Ⅳ．Looking Forward 491
Appendix 2 2013 list of foreign investment projects subject to government approval 493