Registering an RMB Fund as a Foreign Invested Partnership - An Update

Originally published February 18, 2010

Keywords: RMB Fund, foreign invested partnership, SAIC, corporate governance, foreign enterprises, Partnership Enterprise Law, PRC, FIPs

The State Administration for Industry and Commerce (the "SAIC") wishes to see the management experience, techniques and corporate governance of foreign enterprises and individuals applied to promote the development of the private equity industry in China. In this regard, the SAIC has recently issued Decree 47 which paves the way for the registration and operation of PRC law governed, foreign invested partnerships ("FIPs").

Background

The Partnership Enterprise Law of the PRC (the "Partnership Law") came into force on 1 June 2007. Article 108 of the Partnership Law contemplates the formation of FIPs. Pursuant to Article 108, the State Council issued the Measures for the Administration on the Establishment of Partnership Business by Foreign Enterprises or Individuals in China