In a significant move to attract foreign capital, Chinese authorities unveiled revised rules on Friday aimed at encouraging long-term and value-driven investments in the country's listed companies.
The new regulations, collaboratively introduced by six government departments including the Ministry of Commerce and the China Securities Regulatory Commission, mark a pivotal shift. Previously, only foreign juridical persons or organizations could engage in strategic investments, but the updated rules now extend this opportunity to foreign natural persons as well.
One of the standout changes is the reduction in capital requirements for foreign investors who do not seek controlling stakes in listed firms. Under the new guidelines, the minimum capital requirement is set at $50 million in total actual assets or $300 million in total managed actual assets, down from previous thresholds.
Additionally, the introduction of tender offers as an investment option broadens the avenues for foreign investors beyond the traditional private placements and share transfer agreements. Investors can now utilize shares of non-listed overseas companies as consideration shares for acquisition payments when opting for private placements or tender offers.
The revised rules also relax the shareholding ratio and lock-up period requirements. Specifically, the shareholding ratio requirement is eliminated for investments made through private placements, and for tender offers and share transfer agreements, the required ratio has been halved from 10% to 5%.
To promote medium- and long-term investments, the lock-up period for acquired shares has been reduced to a minimum of 12 months, a significant decrease from the previous stipulation of no less than three years.
These regulatory adjustments signal China's commitment to creating a more inviting environment for foreign investors, aiming to foster sustained economic growth and deeper integration into global markets.
Reference(s):
cgtn.com
