China’s State Council Promotes Cross Border M&A

September 22, 2010 Posted by China Briefing Reading Time: < 1 minute

Sept. 22 – The State Council is looking to remove barriers to corporate restructuring in China, recently releasing a circular that aims to optimize and promote mergers and acquisitions in the country.

Guofa [2010] No. 27, released on August 28, calls for the cancellation of existing rules restricting cross border corporate restructuring as well as the improvement of tax sharing between different locations and the broadening of the investment scope for private capital.

The circular also reaffirms preferential tax policies granted to companies undertaking corporate restructuring including assets valuation appreciation, gains on debt restructuring, and transfers of ownership of property.

The circular is mainly aimed at companies engaged in six industries: cement, steel, the production of automobiles, machine manufacturing, electrolytic aluminum and rare-earth mining. China will encourage cross border mergers and acquisitions by providing discounted interest loans among other financial incentives.

For more information or advice on cross border corporate restructuring, please contact Dezan Shira & Associates, Asia’s largest independent foreign direct investment consultancy, at info@dezshira.com.