CHINA Law and Practice Contributed by: Bing Zhai, Commerce & Finance Law Offices
• The State Administration for Market Regula - tion (SAMR) plays a central role in regulating M&A activities, and particularly in enforcing antitrust and competition laws. It reviews transactions to ensure they do not create monopolies or harm market competition. SAMR approval is mandatory for deals that meet certain thresholds related to turnover or market share. • MOFCOM oversees foreign investment- related M&A activities, including transactions involving foreign investors acquiring domes - tic companies. It ensures compliance with China’s foreign investment laws and policies, such as the Foreign Investment Law and the Negative List for Foreign Investment. • The CSRC is the key regulator for M&A involving listed companies. It supervises the disclosure of information, fairness of transac - tions and protection of minority sharehold - ers’ interests. The CSRC also reviews and approves significant asset restructurings and backdoor listings. • The National Development and Reform Com - mission (NDRC) is involved in M&A activities that impact national economic planning and industrial policies. It reviews transactions in strategic sectors, such as energy, infrastruc - ture and technology, to ensure alignment with China’s broader economic goals. • The State Administration of Foreign Exchange (SAFE) regulates cross-border M&A trans - actions by overseeing foreign exchange controls. It ensures that foreign currency transactions comply with China’s capital flow regulations and that funds are used appropri - ately. • In addition to national regulators, local gov - ernments and authorities may also play a role in approving or facilitating M&A transactions, especially those involving state-owned enter -
prises (SOEs) or regional economic develop - ment projects5. These regulators work together to ensure that M&A activities in China are conducted in a man - ner that aligns with legal, economic, and stra - tegic objectives. Companies engaging in M&A must navigate a complex regulatory landscape and obtain approvals from the relevant authori - ties to complete their transactions. 2.3 Restrictions on Foreign Investments MOFCOM and the NDRC oversee the filing or approval processes for foreign-invested enter - prises, where applicable. The SAMR handles the registration, modification, and establishment of foreign-invested enterprises and partnerships. Additionally, the Anti-Monopoly Bureau, oper - ating under MOFCOM, is tasked with review - ing business operator concentrations in M&A transactions, if such reviews are necessary. For foreign investments in specialised sectors, such as financial institutions or aviation, approval from the relevant regulatory authorities is also required. Regarding the negative list review, foreign invest - ments must adhere to the Special Administrative Measures (Negative List) for the Access of For - eign Investment, in addition to complying with the market access negative list, which restricts investments in certain industries. In terms of national security review, the Security Review Measures for Foreign Investment man - date that any investment potentially impacting national security must be proactively declared to the Office of the Working Mechanism of the NDRC prior to implementation. Furthermore, the information reporting system requires foreign investors or foreign-invested
458 CHAMBERS.COM
Powered by FlippingBook