Article 11 In case of an Equity Merger and Acquisition by foreign investors, the ceiling for the total amount of investment of the foreign investment enterprise established upon the Merger and Acquisition shall be determined according to the following proportions:
(1) no more than ten sevenths (1017) of the registered capital of the foreign investment enterprise, if the registered capital is less than US$2.1 million;
(2) no more than twice the registered capital, if the registered capital is between US$ 2.lmillion and US$ 5 million;
(3) no more than two and a half times the registered capital, if the registered capital is more than US$5 million but less than or equal to US$ 12 million; or
(4) no more than three times the registered capital, if the registered capital is more than US$ 12 million.
Article 12 In case of an Equity Merger and Acquisition by foreign investors, the investors shall submit the following documents to the examination and approval authority with corresponding jurisdiction of approval based on the total amount of investment of the foreign investment enterprise established upon the Merger and Acquisition:
(1) the resolution adopted by the shareholders of the domestic limited liability company subject to the Merger and Acquisition unanimously approving the Equity Merger and Acquisition by the foreign investors, or the resolution adopted by the shareholders' meeting of the domestic company limited by shares subject to the Merger and Acquisition approving the Equity Merger and Acquisition by the foreign investors;
(2) the application of the Domestic Company subject to the Merger and Acquisition to be changed in to and established as a foreign investment enterprise in accordance with the law;
(3) the contract and the articles of association of the foreign investment enterprise established upon the Merger and Acquisition;
(4) the agreement for the purchase of the shareholders' equity interest or subscription for the increased capital of the Domestic Company by the foreign investors;
(5) the audited financial report for the most recent fiscal year of the Domestic Company subject to the Merger and Acquisition;
(6) identification documents or incorporation certification and creditworthiness certification of the foreign investors;
(7) explanation of the situation regarding the enterprises the Domestic Company subject to the Merger and Acquisition has invested in;
(8) the business licenses (duplicates) of the Domestic Company subject to the Merger and Acquisition and enterprises it has invested in;
(9) the plan for the re-settlement of the employees of the Domestic Company
subject to the Merger and Acquisition; and
(10) documents required to be submitted under Articles 7 and 19 of the Provisions. Where any permission given by any other government authority is required in connection with the business scope or business scale, or obtaining of any land use right by the foreign investment enterprise to be established upon the Merger and Acquisition, the relevant documents of such permission shall be submitted simultaneously.
The business scope of any company the Domestic Company subject to the Merger and Acquisition originally invested in shall comply with the requirements of relevant foreign investment industrial policies. Adjustments shall be made in case of noncompliance.
Article 13 The equity interest purchase agreement or the agreement to increase the capital of the Domestic Company as set forth in Article 12 of these Provisions shall be governed by the Chinese law and shall contain the following main contents:
(1) information regarding each of the parties to the agreement, including its full name, address. and the name, position and citizenship of its legal representative, etc.;
(2) proportions and the price of the equity interest to be acquired or the increased capital to be subscribed;
(3) term and methods of performance of the agreement;
(4) rights and obligations of the parties to the agreement;
(5) liabilities for breach of the agreement and settlement of dispute; and
(6) the date and the place of the execution of the agreement.
Article 14 In the case of an Asset Merger and Acquisition by foreign investors, the total amount of investment of the foreign investment enterprise established upon the Merger and Acquisition shall be determined on the basis of the transaction price of such assets and the actual scale of production and operation. The proportion between the registered capital and the total amount of investment of the foreign investment enterprise to be established shall be consistent with the relevant regulations.
Article 15 In the case of an Asset Merger and Acquisition by foreign investors, the investors shall submit the following documents to the examination and approval authority with the corresponding jurisdiction of approval, based on the total amount of investment, enterprise type, and industry of the foreign investment enterprise to be established and in accordance with the laws, administrative regulations and departmental rules governing the establishment of foreign investment enterprises:
(1) the resolution by the property rights holders or the agency of authority of the domestic enterprise approving the sale of such assets;
(2) the application for the establishment of the foreign investment enterprise;
(3) the contract and the articles of association of the foreign investment enterprise to be established;
(4) the asset purchase agreement executed between the foreign investment enterprise to be established and the domestic enterprise or the asset purchase agreement executed between the foreign investors and the domestic enterprise;
(5) the articles of association and the business license (duplicates) of the domestic enterprise subject to the Merger and Acquisition;
(6) certification proving that the domestic enterprise subject to the Merger and Acquisition has given notice and the public announcement to its creditors;
(7) identification documents or incorporation certification and creditworthiness of the foreign investors;
(8) the plan for the re-settlement of employees of the domestic enterprise subject to the Merger and Acquisition; and
(9) documents required to be submitted under Articles 7 and 19 of the Provisions.
Where any permission given by any other government authority is required in connection with the purchase and operation of the assets of the domestic enterprise as specified in the above paragraph, the relevant documents of such permission shall be submitted simultaneously.
If foreign investors purchase any assets by agreement with the domestic enterprise and invest such assets to set up a foreign investment enterprise, such assets shall not be used for operation purposes until and unless the foreign investment enterprise has been duly established.
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