How Can Foreign Private Equity Funds Be Established In China?

Overview of QFLP and QDLP

The Qualified Foreign Limited Partnership (QFLP) program is a pilot initiative launched by various local governments in China, designed to provide a key avenue for foreign investors to access China's financial markets. Through this framework, foreign investors may participate in setting up either a foreign-invested equity investment management entity (QFLP Manager) or a foreign-invested equity investment fund (QFLP Fund)—together referred to as QFLP Enterprises.

One of the standout benefits of the QFLP structure is that it allows foreign currency contributions to be converted into RMB at the fund level in advance, enabling RMB-denominated equity investments. This means that foreign exchange settlement is pre-approved upon the establishment of the QFLP entity, rather than being deferred to the capital call stage