中伦观点 | Guangzhou Encourages Foreign Invested VCs

摘要：

广州市人民政府办公厅于近日颁布《广州市风险投资市场规范发展管理办法》，于2017年12月1日起实施。该办法适用于工商注册登记在广州市的风险投资类企业。同时，该办法鼓励境外机构在广州市设立风险投资类企业。

In addition to the uncertainty involved in investment at a geographic distance, foreign firms have historically faced regulatory restrictions.  However, foreign venture capital funds have played an increasing role in China’s venture capital and private equity markets.  As such, China has recently promised to give equal treatment to foreign and domestic venture capital enterprises.  The newly issued Administrative Measures on Venture Capital Market Standardized Development and Management (风险投资市场规范发展管理办法) (“VC Measures”) by Guangzhou Government is among the moves to streamline the incorporation procedures to attract investment into the venture capital market in Guangzhou.  

The VC Measures was effective on 1 December 2017 and applies to venture capital enterprises (“VCEs”) to be incorporated in Guangzhou, China, including: 

(a) equity investment enterprises;

(b) equity investment management enterprises;

(c) start-up investment enterprises;

(d) start-up investment management enterprises; and

(e) private securities investment management enterprises.

The VC Measures allow VCEs to register directly with the company registries, namely the Administrations of Industry and Commerce in Guangzhou (“Guangzhou AICs”).  According to the VC Measures, there is no need to acquire industry access approval to establish a VCE in Guangzhou.  In contract, many other cities in China, however, require that the VCEs be firstly approved by the local industry authorities, in most case, the local finance management bureaus, before registering with the local company registry for the business license.  Yet it is a lengthy and complicated process to apply for such approval. 

Following registration of the VCEs with Guangzhou AICs, the VCEs should also complete the routine registrations and filing procedures for private equity fund managers and private equity products, and credit information of government-funded industrial investment funds.

The VC Measures also provide incentive scheme to VCEs that meet certain conditions.  Private securities investment management enterprises, for example, may receive the following rewards based on its actual trusteeship management size of the private equity investment funds that have completed the registration formalities required: 

•RMB 3 million for the management of funds of RMB 10 billion or more, and 

•RMB 5 million for the management of funds of RMB 50 billion or more.  

The VC Measures indicate, moreover, that the government may provide financial support to VCEs in relation to renting office space.

The VC Measures also encourage foreign venture capital entities to set up VCEs in Guangzhou. Equity investment management enterprises, start-up investment management enterprises and overseas investors may establish equity investment enterprises and start-up investment enterprises using foreign currency for the registered capital.  Under the premise of real and compliance investment projects in China by the equity investment enterprises and start-up investment enterprises, the capital in foreign currency can be converted into RMB fund.  Such converted RMB fund can directly be paid for domestic equity investment and start-up investment according to the actual scale of such investments.

The VC Measures also offer incentive arrangements to the staff of the VCEs.  They include:

(a) the position of high-level financial personnel in Guangzhou, including but not limited to the settlement supporting fund of at least RMB 50,000 for per qualified person;

(b) Guangzhou green card;

(c) permanent residence status;

(d) preferential treatment for purchasing cars;

(e) enrollment of children at schools; and

(f) other types of preferential treatment, including but not limited to the individual income tax reduction or return.

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作者简介：

Kent WOO

Partner  Guangzhou

Practice Areas：

Corporate/Foreign Direct Investment, Litigation & Arbitration, Intellectual Property

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