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Industry Catalogue Introduction - Article 4, Order #10
Certain industries described by the “Foreign Investment Guidance Catalogue” are prohibited from being owned exclusively by a Wholly Foreign Owned Enterprise (WFOE) and a full equity acquisition of these types of Chinese Companies will not be allowed. If an acquisition of a company occurs in an industry which requires a Chinese company to retain controlling or relatively controlling interest, the Chinese company must retain that controlling or relatively controlling interest. A Foreign Party may not acquire a Domestic Company, which deals in an industry which foreigners are prohibited from. The established business scope of a Domestic Company being acquired must comply with the foreign investment industrial policy and in the event these statutes cannot be met, adjustments must be made.
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