2019年3月15日，《中华人民共和国外商投资法》（“外商投资法”或“新法”）经全国人民代表大会审议通过并正式颁布，《外商投资法》将于2020年1月1日生效，并将取代三部外资法律，即《中外合资经营企业法》（“合资企业法”）、《中外合作经营企业法》和《外资企业法》（三法合称为“三资企业法”）。本所已有六篇系列文章，对外商投资法从不同角度、不同切入点进行解读。本文重点阐述新法对境外私募基金（“PEs”）增资内资企业的影响以及探讨在新法生效之前的过渡期所设立的中外合资企业如何与未来的新法及《中华人民共和国公司法》（“公司法”）更好地衔接。
On March 15, 2019, the Foreign Investment Law of the People’s Republic of China (“Foreign Investment Law” or “New Law“) was officially promulgated by the National People’s Congress. The Foreign Investment Law will become effective on January 1, 2020 and will replace the three Foreign Investment Enterprise Laws, namely the “Sino-foreign Joint Venture Enterprise Law” (“Joint Venture Law“), the “Sino-foreign Cooperative Enterprise Law” and the “Foreign Enterprise Law” (the three laws collectively referred to as the ” Three Foreign Enterprise Laws “). Guantao Law Firm has published six related articles to analyze the New Law from different angles and different aspects. This article focuses on the impact of the New Law on foreign private equity funds’ (“PEs”) subscription of capital increase in the domestic enterprises and explores how Sino-foreign joint ventures established during the transition period can better adapt to the New Law to be effective and the Company Law of the People’s Republic of China (the “Company Law”).

当境外PE增资内资企业时，该企业需要转变为中外合资企业。如果是经过了几轮股权融资的内资企业，股东之间往往签署了篇幅较长内容复杂的股东协议，明确各股东之间的权利义务。转变为中外合资企业后，合营各方之间需要签署合资合同，明确合营各方的权利义务。是否将股东协议与合资合同合二为一，有不同的观点。 有的认为，如果不合二为一，有可能存在两份内容不一致的合同，或者两份内容一致但名称不同的合同； 有的则认为，股东协议包含不少从西方引进的有利于各轮PE投资人的条款，涉及各轮投资人的敏感利益，如果合并修改，有可能各方需要重新谈判讨论，难度较大，工作量大，尤其三资企业法将在2020年1月1日被新法取代，新法规定外商投资企业的组织形式、组织机构及其活动准则，适用公司法的规定，公司法在股权转让等方面赋予中外股东更多契约自由和更大的自主权，为避免未来对股东协议做大篇幅修改，在过渡期可以保留原内资企业的股东协议并在其基础上修改，对那些不符合合资企业法及《中外合资企业法实施条例》（“实施条例”）强制性法律规定的地方进行小范围修改，同时起草一份简单的合资合同，对实施条例所规定的合资合同必备条款进行约定。后一种观点主要是从实操层面考虑的。
When the domestic enterprise increases its capital by foreign PE, the domestic company needs to be converted into a Sino-foreign joint venture. In the case of a domestic enterprise which has undergone several rounds of equity financing, there may already exist lengthy and complicated shareholder agreements clarifying the rights and obligations of each shareholder. After the conversion, parties of the joint venture need to sign a joint venture contract to clarify the rights and obligations of each party. There are different views about whether the shareholder agreement and the joint venture contract should be combined into one. Some believe that if these two contracts are not combined into one, there may be two contracts with inconsistent contents, or two contracts with the same content but under different contract names. Some believe that the shareholder agreement contains a number of provisions introduced from the West beneficial to all rounds of PE investors, which involves sensitive interests of investors in each round. Any revisions to the original shareholder agreement may be difficult for the parties, as it requires renegotiations to reach a consensus. In particular, the Three Enterprise Laws will be replaced by the New Law on January 1, 2020. The New Law stipulates that the provisions of the Company Law will apply to foreign invested enterprise in terms of the company’s structure, organization and activity standards. The Company Law gives domestic and foreign shareholders more freedom of contract and greater autonomy. In order to avoid extensive revisions to the shareholder agreement in the future, we suggest the original domestic company’s shareholder agreement to be kept and revisions can be based on it during the transition period. For those provisions of the shareholder agreement that do not comply with the Joint Venture Law and the Implementation Regulations of the Sino-foreign Joint Venture Law (the “Implementation Regulations”), modifications can be made according to the mandatory requirement. At the same time, a simple joint venture contract can be drafted to include all the mandatory clauses required by Implementation Regulations. The latter view is mainly from the practical perspective.

以下几个方面是内资企业转变为外商投资企业，在修改公司原有的股东协议和章程及起草合资合同过程中我们重点关注的问题：
The following aspects are the issues that we focus on when we revise the original shareholder agreement or articles of association, or when we draft the joint venture contract in the case of a domestic company converted into a foreign invested company：

1.股权转让的限制
Restriction of Share Transfer

公司法规定股东向股东以外的人转让股权，应当经其他股东过半数同意，在同等条件下，其他股东有优先购买权，但允许有限公司通过章程的规定做出与上述条款不同的约定，也即允许股东向股东以外的人转让股权，可以不经其他股东过半数同意并且可以排除其他股东的优先认购权。然而，实施条例则规定股东向第三方转让股权，须经合营他方同意且不能排除其他股东的优先购买权。 虽然新法规定了外商投资企业在组织形式及活动准则方面适用公司法规定，但具体包括哪些方面，目前还没有实施细则或司法解释。因此，如果按照现行有效的实施条例，合资公司的合资各方包括境外PE及前轮PE向第三方转让股权是受优先认购权的限制的。从目前到新法生效及新法实施细则颁布之前，如何解决PE的诉求与现行有效的合资企业法及其实施条例相冲突的问题，需要股东各方的协商、与注册和审批备案机构的沟通以及对股东协议和/或合资合同相关条款处理的技巧。
The Company Law stipulates that a shareholder who wishes to transfer its shares to a third party other than shareholders shall have the consent of more than half of the other shareholders. Under the same conditions, other shareholders have the preemptive rights. However, the company is allowed to make a different provision by articles of association, which means that shareholders may, without the consent of more than half of the other shareholders, exclude the preemptive rights of other shareholders if there is such provision in the articles of association. Nevertheless, the Implementation Regulations stipulate that the transfer of shares by a shareholder to a third party is subject to the consent of the other parties and cannot exclude the preemptive rights of other shareholders. Although the New Law stipulates that the Company Law shall be applied to the foreign invested enterprises in terms of organizational form and activity standards, there are no implementation rules or judicial interpretations to address these issues yet. Therefore, in accordance with the current effective Implementation Regulations, the transfer of equity from joint venture parties, including foreign PEs and former round of PEs, to third parties is subject to the preemptive right. Before the New Law becomes effective and its related implementation regulations are enacted, the issue of resolving the conflict between the request of foreign PEs and the existing effective mandatory provisions of Joint Venture Law requires the negotiation between shareholders, the communication with the registration and approval authorities, and the techniques of contract drafting and wording

2. 最高权力机构
Supreme Authority of the Joint Venture

公司法规定的最高权力机构是股东会，实施条例规定中外合资企业的最高权力机构是董事会。因此，股东协议的公司治理章节需要删除有关股东会的内容，将股东会的权限平移到董事会。新法生效后，现有的中外合资企业的股东协议和/或合资合同又将需要修改，将最高权力机构从董事会变回股东会。The supreme authority prescribed by the Company Law is the shareholders’ meeting. The supreme authority of the joint ventures stipulated in the Joint Venture Law and its Implementing Regulations is the board of directors. Therefore, any content of the shareholders’ meeting shall be deleted from the corporate governance chapter of the shareholder agreement and the power of the shareholders’ meeting shall be moved to the board of directors. Whereas, after the New Law comes into effect, the shareholder agreements and/or joint venture contracts of the existing Sino-foreign joint ventures will need to be revised again, and the supreme authority will be changed from the board of directors to the shareholders’ meeting.

根据实施条例的规定，董事名额的分配由合营各方参照出资比例协商确定。事实上，公司的估值越高，PE投资的风险越大，董事名额的分配越难参照出资比例确定。即使出资比例不高，如果投资金额大（投资金额与出资金额的差额进入资本公积金），PE往往要求董事席位及一票否决权，这与PE投资的规模、各方谈判地位以及市场环境等都有关系。新法生效后，股东会是最高权力机构，合资企业的重大决策将由股东会通过决议形式作出，这对一般的合资企业来说一定程度上减少了董事会席位之争，但对于有多轮PE投资人的公司来说，无论是内资公司还是外资公司，董事会席位依然是各个股东争夺的焦点。
According to the provisions of the Implementation Regulations, the allocation of directors’ seats shall be determined by the parties of the joint venture with reference to their corresponding proportions of capital contribution. In fact, with higher company valuation and greater investment risk of the PE, it is more difficult to determine the proportion of directors’ seats according to shareholders’ respective capital contributions. Even the proportion of capital contribution is not high, if the PE’s investment amount is large (the difference between the investment amount and the capital contribution will become the capital reserve), the PE often demands a board seat and the right to a one-vote veto. This is depended on the investment amount, the negotiating position of the parties, and the market condition etc. After the New Law comes into effect, the shareholders’ meeting would be the supreme authority, and the critical decisions of the joint venture will be made by the shareholders’ meeting. Generally speaking, this will, to a certain extent, reduce the contention for board seats between parties of a joint venture. Nevertheless, for those companies which have undergone multiple rounds of PE investments, whether it is a domestic company or a foreign invested company, the board seats are still the focus of contention among shareholders.

另外，根据实施条例，合资公司章程的修改；合资公司的中止、解算、增加或减少注册资本及合并、分立需要出席董事会会议的董事一致通过，未来按照公司法的规定，则只需要经代表2/3以上表决权的股东通过即可。尽管如此，对于涉及到PE股东根本权利的事项，PE依然可以要求2/3以上表决权的股东中必须包括PE投资人，也即PE作为股东在某些重大事项上有一票否决权。
In addition, according to the Implementation Regulations, amendments to Articles of Association; suspensions, dissolutions, increase or decrease of the registered capital of joint ventures; and mergers and spin-offs of joint ventures shall be unanimously passed by the directors who presented at the board meeting.  According to the stipulations of the Company Law, such resolutions can be passed by the shareholders who represent more than 2/3 of the voting rights. Despite this, for matters involving the fundamental rights of PE shareholders, PE can still demand there to be provisions in the shareholder agreement and articles of association to the effect that PE must be included in the 2/3 counts. In other words, the PE as a shareholder has a veto on certain major matters.

3. 外国投资者的最低持股比例
The Minimum Shareholding Ratio of Foreign Investors

合资企业法规定，在合营企业的注册资本中，外国合营者的投资比例一般不低于25%， 例外情况是，根据《关于外国投资者并购内资企业的规定》，外国投资者在并购后所设外商投资企业注册资本中的出资比例低于25%的，除法律和行政法规另有规定外，该企业不享受外商投资企业待遇，登记管理机关、外汇管理机关分别向其颁发加注“外资比例低于25%”字样的外商投资企业营业执照和外汇登记证。因此，境外PE认购内资企业增资，注册资本比例可以低于25%。
The Joint Venture Law stipulates that the proportion of foreign investors’ investment is generally not less than 25% of the registered capital. However, there is one exception according to Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors. If the proportion of capital contribution in the registered capital of a foreign-invested enterprise established after equity acquisition is less than 25%, the enterprise shall not enjoy the treatment of foreign-invested enterprise unless otherwise stipulated by laws and administrative regulations. The registration authority and the foreign exchange administration authority shall respectively issue business licenses and foreign exchange registration certificates for foreign-invested enterprises with a remark stating that “the proportion of foreign investment is less than 25%”. Therefore, in the case of foreign PEs subscription for capital increase of domestic enterprises, its registered capital ratio can be less than 25%.

新法对注册资本的外资出资比例问题没有明确规定，有待未来国务院或国家部委进一步制定的实施细则或部门规章予以确定。但按照实行内外资企业统一注册资本制度的精神来看，很有可能将取消注册资本中外资比例不得低于25%的限制规定。
The New Law does not explicitly stipulate the minimum proportion of capital contribution in registered capital required for foreign investors.  This needs to be further specified by the implementation rules or departmental rules formulated by the State Council or the national ministries. To be in consistent with the guidelines of implementing the unified registered capital system for domestic and foreign invested enterprises, it is likely that the restrictions that the proportion of foreign invested capital in registered capital cannot be less than 25% will be lifted.

4.监事（会）的设置
The Setting of Supervisor or Association of Supervisor (“Supervisors”)

合资企业法及其实施条例对监事（会）没有相关条文规定，也即不要求合资企业设立监事（会）。内资企业的股东协议及章程则需要有监事（会）的章节。由于没有法律的强制性规定禁止合资公司设立监事（会），为未来新法生效后更好的衔接公司法，在注册与备案机关不反对的情况下，合资合同可以采取与原内资企业的股东协议及章程一致的监事（会）条款。事实上，从我们以往的项目经验，留意到一些省市的工商部门和商务部门联合制作提供的中外合资企业章程制式范本，也有监事（会）这一章节的内容。
The Joint Venture Law and its Implementation Regulations have no relevant provisions regarding Supervisors, meaning that it is not required for joint ventures to set up the Supervisors organization. But it is required for domestic enterprises to prepare a section of the Supervisors in the shareholder agreement and articles of association. Since there is no mandatory provision prohibiting join ventures from establishing Supervisors, in order to be better adapt to the New Law, the joint venture contract may adopt the terms of the Supervisors in accordance with the original shareholders’ agreement and the articles of association of the domestic enterprise, if such approach is not objected by the registration and filing authorities. In fact, from our past experience, the template of the articles of association jointly prepared by the registration and approval authorities of some provinces and municipalities also has the chapter of Supervisor.

5. 自然人作为中方股东的限制
Restriction of Chinese Individual as Shareholder

2018年修正的《宪法》第18条规定，允许外国的企业和其他经济组织或者个人在中国投资，同中国的企业或者其他经济组织进行各种形式的经济合作。 2016年修正的合资企业法规定，允许外国公司和其它经济组织或个人同中国的公司、企业或其它经济组织共同举办合营企业。由此可见，中国境内自然人直接以新设或股权并购外商独资企业等方式成为中外合资企业的中方投资者仍存在法律障碍。Article 18 of the Constitution as amended in 2018 stipulates that foreign enterprises and other organizations or individuals are allowed to invest in China, and to carry out various forms of economic cooperation with Chinese enterprises or other economic organizations. The Joint Venture Law as amended in 2016 allows foreign companies and other economic organizations or individuals to establish joint ventures jointly with Chinese companies or other organizations. It can be seen that there are still legal obstacles for Chinese individuals to become the shareholders of a joint venture by establishing a new one with foreign investors or by equity merger and acquisition of a wholly foreign-owned enterprise.

但是，有一种例外情况，根据《关于外国投资者并购境内企业的规定》，被股权并购境内公司的中国自然人股东，经批准，可继续作为变更后所设外商投资企业的中方投资者。因此，境外PE增资内资企业，原内资企业的自然人股东可以继续作为股东。值得注意的是，如果原内资企业的中国自然人股东之间存在代持情况，内资企业变更为中外合资企业后，需要还原被代持股权的，代持股东向被代持股东转让股权有可能存在一定的法律障碍。另外，内资公司的员工激励股权如果是被创始人或大股东代持，未来需要还原为员工直接持股也有可能存在一定的法律障碍。
However, there is an exception. According to the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, in the event that the equities of a domestic company have been acquired by foreign investors, the original shareholders which are Chinese natural persons, after approval from relevant authorities, continue to be qualified as Chinese investors of the foreign invested enterprise. As such, after foreign PEs subscribe for capital increase of the domestic enterprise, its shareholders which are Chinese natural persons can continue to be shareholders of the joint venture. It is important to note that, if there is any share entrustment agreement between two Chinese natural persons, then there may be certain legal obstacles for the entrusted equities to be restored in the future after the domestic company being converted to the joint venture. In addition, if the employee-incentive stocks of the joint venture are held by the founder or the controlling shareholder, there may be certain legal obstacles in the future for the stocks to be restored to the employee’s direct shareholding.

现行的法律法规已经可以突破上述障碍。公司法规定境内自然人可以设立一人有限公司。境内自然人可以设立一人有限公司并以该一人有限公司与外国投资者共同设立中外合资企业的方式成为中方投资人。此外，境内自然人还可以设立合伙企业，以合伙企业与外国投资者共同设立中外合资企业的方式成为中外合资企业的中方投资者。 境内自然人如需受让合资企业股权或参与合资企业的增资，可以设立一人公司作为受让主体或作为增资主体。员工的激励股权也可以通过设立员工持股平台（有限公司或有限合伙）的方式在适当的时候受让代持股东转让的股权。
The above obstacles can already be overcome under the current laws and regulations. The Company Law stipulates that a Chinese individual can establish a one-person limited company. Chinese individual can use this company to establish a joint venture with the foreign investors. In addition, Chinese individual can set up a partnership and use this partnership to establish a joint venture with foreign investors. If Chinese individuals need to acquire the equities or to participate in the capital increase of a joint venture, a one-person company may be established as the transferee or as the subscriber for the capital increase. The employee’s incentive stocks held by the nominal shareholder can also be transferred to the employee’s stock holding platform (limited liability company or limited partnership) when appropriate.

新法对外商投资企业的中方股东采用了“其他投资者”的表述，是否意味着中国自然人能够以新设的方式与外国投资者共同设立外商投资企业或投资现有外商投资企业还有待进一步的规定。
The New Law refers to Chinese investors as “other investors” for foreign invested companies. Does it mean that Chinese individual can establish foreign-invested enterprises or can invest in existing foreign-invested enterprises with foreign investors?  We will wait for the further implementation rules.

以上是外资PE增资内资企业时，我们在相关协议的谈判及起草修改过程中遇到的较为重要的问题，其他的如利润分配、投资总额及注册资本等问题，各方都较容易按照合资企业法的相关规定达成一致，在此不做详述。如需详情，欢迎联系我们。
The above are some important issues that we encountered during the negotiation and drafting of the relevant agreements when foreign PEs subscribed for capital increase in the domestic enterprises. Other issues such as profit distribution, total investment and registered capital etc., are easier to be agreed upon by parties in accordance with Joint Venture Law. We do not elaborate such issues in this article. If you need further information, please feel free to contact us.

作者简介： 颜海玲律师系观韬中茂国际公司证券业务线合伙人，在资本市场及公司与并购方面具有丰富的执业经验，同时拥有多年海外工作经验。颜海玲律师的主要业务领域为境内外上市、投融资、并购业务、外商直接投资及涉外商事争议的解决。颜海玲律师还曾任北京市律师协会公司法委员会委员 ，现任北京市律师协会第十届侵权法委员会委员。联系方式：Email: yanhl@guantao.com
Author Profile: Helen Yan is a partner in the international corporate and securities department of Guantao Law Firm. Helen is experienced in capital market, corporate and M&A transaction matters. She has many years of overseas work experience. Her main practice areas are domestic and overseas listing, investment and financing, mergers and acquisitions, foreign direct investment and foreign-related commercial disputes. She has also served as a member of the Corporate Law Committee of the Beijing Bar Association and is currently a member of the 10th Tort Law Committee of the Beijing Bar Association. Her contact info: yanhl@guantao.com