Technology M&A 2025

CHINA Law and Practice Contributed by: Wei Chen, Yue Zhang, Hao Peng and Yi Sun, JunHe LLP

business operator through contracts or other arrangements. A notification must be made to the SAMR before the transaction if the relevant business operators’ turnover exceeds any of the following thresholds. Threshold 1 (New Thresholds in Force as of January 2024) The aggregated worldwide turnover of all busi- ness operators involved in the concentration in the last fiscal year exceeds RMB12 billion. Each of at least two of the business operators involved in the concentration has Chinese turno- ver exceeding RMB800 million in the last fiscal year. Threshold 2 (New Thresholds in Force as of January 2024) The aggregated Chinese turnover of all business operators involved in the concentration in the last fiscal year exceeds RMB4 billion. Each of at least two of the business operators involved in the concentration has Chinese turno- ver exceeding RMB800 million in the last fiscal year. 7.6 Labour Law Regulations Labour-Related Regulations The labour law regulations that acquirers should primarily be concerned with in M&A transac- tions in China are the Labour Law, the Labour Contract Law, the Social Insurance Law and the Regulations on Administration of Housing Fund. Works Council China has a trade union regime. Generally speak- ing, the functions of trade unions in China may differ from those in other countries. Rather than

being in conflict with employers, trade unions in China operate in a much softer way, aiming to maintain a harmonious relationship between employers and employees, and are usually less powerful than trade unions in other countries. According to the PRC Trade Union Law, employ- ees have the freedom to choose whether and how to establish a trade union and become a member of it, and employers are only required to respect and support the right and not obstruct them. During special cases such as lay-offs due to extreme operational difficulties, or the employ- er’s unilateral termination of employment con- tracts, employers are required to notify trade unions first or obtain opinions from them, but their opinions are usually not binding. Theoretically, the trade union may also represent its members to negotiate working benefits and sign collaborative employment contracts with the employers, but this is relatively rare in prac- tice. 7.7 Currency Control/Central Bank Approval China has a foreign exchange control regime, which usually takes the form of local bank reg- istration. A foreign exchange registration is required at local banks in the following circum- stances. • The establishment of a foreign invested com- pany, and the subsequent injection or reduc- tion of registered capital. • The acquisition of shares in a Chinese com- pany by a foreign investor from a Chinese investor.

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