Detailed explanation of ODI filing for outbound direct investment

Table of Contents

Strictly check the investment type in the overseas investment (ODI) filing section

Overseas direct investment will be strictly checked: such as: restricted industries, investment platforms that are not related to the main business, and have no actual operations. If you cannot explain the specific fund use plan, source of funds (including self-owned funds, bank loans, raised funds and other compliant methods), and the authenticity of overseas investment projects, it will be difficult to pass the review.

　Overseas Investment (ODI) Filing Overseas Investment Management Measures

Basis for handling

"Overseas Investment Management Measures" (Ministry of Commerce Order No. 3 of 2014)

Applicable objects

Enterprises own non-financial enterprises or obtain ownership, control, management rights and other rights and interests of existing non-financial enterprises overseas through new establishment, mergers and acquisitions and other means.

Accepting agency

Central enterprises shall be registered by the Department of Overseas Investment and Economic Cooperation of the Ministry of Commerce, and local enterprises shall be registered by local commercial authorities

Registration conditions

1. Applicant conditions: enterprises and institutions established in accordance with the law within the territory of China

2. Registration shall be approved if the following conditions are met or satisfied: the application materials are complete, truthful and complete, and comply with the legal form.

3. Registration shall not be granted if any of the following circumstances exist: (1) the application materials are incomplete or do not comply with the legal form. (2) It is a case of approval. (3) The enterprise provides false materials for application. (4) Other circumstances where registration shall not be granted.

Application materials

1. Overseas investment registration form; 2. Copy of business license; 3. Relevant supplementary materials (① Relevant articles of association (contracts, agreements) for establishing enterprises or mergers and acquisitions by overseas investment ② Relevant board resolutions or capital contribution resolutions ③ The latest audited financial statements ④ Description of the implementation of preliminary work (including: due diligence, feasibility study report, description of investment fund sources, investment environment analysis and evaluation, etc.) ⑤ M&A type overseas investment requires submission of "Preliminary Report Form for Overseas Mergers and Acquisitions" ⑥ Commitment of authenticity of overseas investment)

　Overseas investment (ODI) registration SASAC approval or filing

If the overseas investment subject is a state-owned enterprise, it involves the approval or filing of SASAC. According to Article 6 of the Notice of the State-owned Assets Supervision and Administration Commission of the State Council on Strengthening the Management of Overseas Investment by Central Enterprises, overseas investment projects that are part of the main business of an enterprise must be reported to the SASAC for filing, and non-main business overseas investment projects must be reported to the SASAC for review. At the same time, according to Article 10 of the "Interim Regulations on Equity Investment Management of Municipal State-owned Enterprises", state-owned enterprises that conduct overseas equity investment and cross-border guarantees for overseas mergers and acquisitions financing should be reviewed according to internal decision-making procedures. After review by the invested enterprises, the invested enterprises shall report to the Municipal State-owned Assets Supervision and Administration Commission for approval.

Our services for overseas investment (ODI) filing

1. Design and evaluation of overseas investment plans

2. Full guidance on the preparation of normative materials (company articles of association, board resolutions, authenticity commitments, equity structure, proof of funds, etc.)

3. Preparation of due diligence reports and explanations of the implementation of preliminary work (including feasibility reports, sources and explanations of investment funds, investment environment analysis, due diligence, etc.)

4. Investment project descriptions, filing forms and other overseas investment declaration documents

5. Submit written and systematic materials to the Development and Reform Commission and the Ministry of Commerce to assist in completing the registration procedures of the State Administration of Foreign Exchange

Due Diligence

　　Purpose of Due Diligence

1. Clarify the target company's business prospects

2. Understand the target company's industry position and future development trends

3. Prepare for value enhancement after the transaction is completed and the formulation of post-merger integration plans

Scope of Due Diligence

Macro environment, market size, competitive landscape, business processes, infrastructure, corporate value, etc.

Due Diligence Services

1. Establish a due diligence team to determine the purpose, object and scope of due diligence

2. Combine the project to review and retrieve relevant laws and regulations, and collect background information on the target company and industry

3. Design a due diligence questionnaire list based on the project, transaction structure, etc.

4. Communicate with the management of the target company on the preparation of materials and conduct a preliminary inspection of the materials

5. Sign a confidentiality agreement to clarify the confidentiality content and scope as well as the liability for breach of contract

6. Collect and organize materials according to the determined due diligence method, including: checking files, checking the business registration information of the enterprise, checking the account books, issuing a statement, on-site field inspection, telephone and email communication, confirmation letter, etc.

7. Prepare working drafts for the documents and materials provided by the investigation object, such as articles of association, agreements, and rulings

8. Review the due diligence materials, analyze the information obtained, and conduct additional investigations based on the analysis results

9. Different professional teams exchange opinions on common issues

10. Draft a due diligence report, list the problems found, explain the nature of the problems, the impact caused and the solution

11. Follow up on the problems found and supplement the subsequent information

12. Communicate with the client and the target company on the due diligence report and revise the due diligence report

Legal Opinion

A legal opinion is a comprehensive written document for lawyers to provide legal services. It was issued on July 11, 2003. Its content includes providing legal basis, legal advice and solutions to problems to the consultant. When lawyers serve as legal advisors to companies, legal persons, other economic organizations or governments and answer relevant legal consultations, they often respond to major legal affairs or major business decision-making behaviors in the form of legal opinions, seeking legal basis for the important economic activities, major business decision-making behaviors and major legal affairs that the client or consultant wants to engage in, and making legal advice or legal interpretations.

Legal opinion service content

1. Collect and organize the list of documents for the issues to be resolved by the client in the early stage

2. Summarize the basic facts of the case and the corresponding issues

3. Find relevant laws and regulations, refer to local documents, regulations, approvals, etc., and conduct on-site investigations in actual departments

4. Sort, analyze and compare the contents of the investigation and inquiry, and formulate different solutions for different problems

5. Analyze the specific implementation process of the plan and the matters that need to be paid attention to from the legal perspective