The Chinese Ministry of Commerce (MOFCOM) and five other government agencies announced revised regulations on foreign investment in listed companies on November 1, which make it easier to invest and aim to attract more high-quality investment.
In a major change, individual foreign investors can now make strategic investments in listed companies. Previously, only legal entities were eligible. In addition, the new rules reduce the asset requirements for non-controlling foreign investors from US$100 million to US$50 million for their total assets, and US$300 million instead of US$500 million for assets under management.
The new rules add tender offers as an extra option to make strategic investments. In the past, the only available options were private placements and share transfer agreements, Xinhua News Agency reported. The shareholding ratio requirement is scrapped for foreign investors making investment through private placements, while the ratio requirements for the options of tender offers and share transfer agreements are lowered to 5 percent from the previous 10 percent. The required lock-up period for shareholding is reduced from 3 years to 12 months.
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