Mergers and Acquisitions Lawyers in China

Entrepreneurs interested in mergers and acquisitions (M&A) in China can opt for the personalized services offered by our experts. With the help of our M&A lawyers in China, you can better understand what this process entails and what the steps to follow for a successful transaction are. First of all, you can go through the following lines to get an idea about mergers & acquisitions in China.

Rules for corporate mergers and acquisitions in China

The Rules on Acquisition and Merger of Domestic Enterprises by Foreign Investors represent the guidelines and general principles for performing any corporate fusions in China. Mergers and acquisitions are a way for foreign companies to enter the Chinese market if opening a company is not an option or a desired course of action. Companies that agree to mergers benefit from this process and use it as a means of financing their operations.

The way the newly formed company is treated depends on the amount of financial contribution of the foreign investor in the registered capital of that company: the enterprise will be treated as a foreign-invested one after the merger under the Foreign Investment Law (in force since 1 January 2020) whenever a foreign investor holds equity; the former 25 percent threshold no longer matters.

We have prepared a video about the rules standing at the base of mergers and acquisitions in China, and we invite you to watch: 

Special approvals for mergers and acquisitions in China

The foreign-invested companies that are formed after a merger or acquisition in China can be subject to Negative List restrictions and to a foreign investment security review (NDRC and MOFCOM) if they operate in certain business fields. In these cases, the investor must apply for approval to the Ministry. Once the investor merged or acquired a corporation, agreements can be reached between the legal entities regarding the treatment of creditors and employees in China.

Legislation related to M&A in China

Entrepreneurs interested in mergers and acquisitions in China can be helped by our Chinese M&A lawyers. We can explain both the conditions of such a process and the aspects related to the legislation. Let’s review a few of the regulations imposed in China in this matter:

• The Chinese Company Law also applies to M&A in China. This set of laws contains clear information and provisions on how mergers and acquisitions in China take place. The latest revision was adopted on 29 December 2023 and took effect on 1 July 2024.
• Interim Provisions on Takeover of Domestic Enterprises by Foreign Investors is another set of laws that target M&A in China. Some of the provisions refer to how a company can be acquired, the qualifications of interested investors, as well as industry-specific guidelines.
• The Special Administrative Measures (Negative List) for Foreign Investment Access (2024 edition, in force since 1 November 2024) contains information about business sectors where the acquisition of companies is prohibited for foreign entrepreneurs. Moreover, the same set of laws is updated periodically.
• Also, provisions of the Anti-Monopoly Law are considered in M&A in China. This set of laws includes the definition of business control and penalties for illegal businesses/companies.

About China’s M&A in numbers

If you are interested in M&A in China, we invite you to find out some recent statistical data in this business sector:

• The value of M&A in China in 2024 exceeded USD 276.9 billion
• In 2023, the value of M&A in China was almost USD 330.7 billion.
• About USD 158 billion was the total value of M&A in China in the second half of 2024.

In addition to specialized support for M&A in China, we invite you to discover other services. We assist foreigners in immigration to China. As such, a residence permit will be required. Plus, citizenship in China and related procedures can be handled by our team. In matters of business, you can rely on us for trademark registration in China, and also to opt for our team of accountants in China from the very beginning of your firm. We can also help you with the divorce in China by managing the procedures involved. Feel free to contact our law firm in China and find out more about the legal services we offer to local and international entrepreneurs.