Legal Question in Investment Law in China

Venture capital funds in China

Venture capital funds in China are close-end fund. They may raise money by issuing shares to definite individuals, groups or other entities, including investment companies, foreign investors. Temporarily, laws do not allowed them to raise money from Chinese stock market. So a Venture capital fund is a private fund. It may invest into high-tech private companies who do not issue shares publicly. It may gain shares by purchasing shares of such company, or by increasing a company�s registered capital. If a high-tech private company growing into a public company, the company may issue shares, sale stocks in stock exchange.

Ways for a venture capital fund to withdraw capitals gaining profit are

one, transfer a private company�s shares privately;

two, transfer a public company�s stocks publicly in stock market.

Just for your reference, if you need more information, we may contact. yours sincere

Chinese Lawyer Lor Rueng Chung