Legal Regime of Equity Contribution in China and its Implications for Direct Investment.

The article discusses the principles regarding equity contributions considered by the Chinese State Administration of Industry and Commerce (SAIC) in its codification of national regulations. An equity or share will be contributed by an investor to an existing company in exchange for equity in a new company. Chinese enterprises and foreign-invested enterprises based in the country are recognized as qualified investors. The restrictions for investor equity, asset appraisal and capital verification are discussed.