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National Development and Reform Commission
Order of the National Development and Reform Commission
No. 39
The Interim Administrative Measures for the Startup Investment Enterprises have been deliberated and approved by the State Council
on September 7, 2005, hereby promulgated jointly by National Development and Reform Commission, Ministry of Science and Technology,
Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Taxation, State Administration for Industry
and Commerce, China Banking Regulatory Commission, China Securities Regulatory Commission, and State Administration for Foreign Exchange
and shall come into force as of March 1, 2006.
Director Ma Kai
National Development and Reform CommissionNovember 15, 2005
Interim Administrative Measures for the Startup Investment Enterprises
Chapter I General Provisions
Article 1
For the purposes of promoting the development of startup investment enterprises, regulating their investment operations and encouraging
them to invest in small and medium-sized enterprises, especially the small and medium-sized high and new tech enterprises, these
Measures are formulated in accordance with the Company Law of the People’s Republic of China, Law of the People’s Republic of China
on the Promotion of Small and Medium-sized Enterprises, and other laws and regulations.
Article 2
The term “startup investment enterprise” as mentioned in these Measures refers to any enterprise organization registered and established
within the territory of the People’s Republic of China for the purpose of mainly engaging in startup investment activities. The term
“startup investment” as mentioned in the preceding paragraph refers to the investment mode that any stock right is invested into
a startup enterprise for expectation of profits of capital increment by way of stock right transfer after the invested startup enterprise
becomes mature or relatively mature. The term “startup enterprise” refers to any growing enterprise registered and established within
the territory of the People’s Republic of China and is during the course of establishing or re-establishing , excluding those enterprises
that have listed in the open market.
Article 3
The state adopts archival filing management for startup investment enterprises. Where any startup investment enterprise has gone through
the archival filing formalities in accordance with these Measures, it shall accept the supervision of the administrative organ for
startup investment enterprises and may enjoy the policy support when it carries out investment operations in conformity with the
relevant provisions. Where any startup investment enterprise fails to go through the archival filing formalities according to these
Measures, it shall not subject to the supervision of the administrative organ for startup investment enterprises, nor does it enjoy
the corresponding policy support.
Article 4
The archival filing administrative departments are classified into two levels, i.e. administrative department of the State Council
and administrative departments of the provinces (including sub-provincial cities). The administrative department of the State Council
shall be the National Development and Reform Commission. The administrative departments of a province (including sub-provincial city)
shall be determined by the people’s government at the same level, perform the corresponding archival filing administration functions
after it has gone through the archival filing formalities in the administrative department of the State Council, and accept the guidance
of the administrative department of the State Council on the archival filing administration work of the startup investment enterprises.
Article 5
The Provisions on the Administration of Foreign-funded Startup Investment Enterprises shall be applied to foreign-funded startup
investment enterprises. If the investment operations carried out by a lawfully established foreign-funded startup investment enterprise
accord with the relevant conditions, this enterprise may enjoy the relevant policy support granted to startup investment enterprises
under these Measures.
Chapter II The Establishment and Archival Filing of Startup Investment Enterprises
Article 6
A startup investment enterprise may be established in the form of a limited liability company, joint stock limited company, or any
other enterprise organization as prescribed by law. A startup investment enterprise established in the form of a company may entrust
another startup investment enterprise or startup investment management consulting enterprise to act as its management consulting
institution, which shall be responsible for the management of its investments. The General Principles of the Civil Law of the People’s
Republic of China, the Contract Law of the People’s Republic of China, and other relevant laws and regulations shall be applied
to the relationship between the consigner and the attorney.
Article 7
To apply for establishing a startup investment enterprise or startup investment management consulting enterprise, the applicant shall
register directly in the administrative department for industry and commerce according to law.
Article 8
A startup investment enterprise registered in the administrative department for industry and commerce of the state shall apply the
archival filing formalities in the administrative department of the State Council. A startup investment enterprise registered in
the administrative department for industry and commerce at the province level or below shall apply the archival filing formalities
in the local administrative department of the province (including sub-provincial city).
Article 9
To go through the archival filing formalities, a startup investment enterprise shall provided with the following conditions:
(1)
It has been registered in the administrative department for industry and commerce;
(2)
Its business scope conforms to the provisions of Article 12 of these Measures;
(3)
The amount of its actual paid-in capital is no less than RMB 30 million yuan, or the amount of the down payment of its paid-in capital
is not less than RMB 10 million yuan, and all investors make a commitment to make up the balance of actual paid-in capital in a sum
of not less than RMB 30 million yuan within 5 years after the registration;
(4)
The number of investors shall not exceed 200 persons. For a startup investment enterprise established in the form of a limited liability
company, the number of investors shall not exceed 50 persons. The amount of investment made by a single investor into a startup investment
enterprise shall not be less than 1 million yuan. All investors shall make investments in monetary form.
(5)
It shall have at least 3 senior managers who have 2 or more years of startup investment experience or other relevant business experience
to take charge of the investment management. If it entrusts another startup investment enterprise or startup investment management
consulting enterprise as a management consulting institution to undertake its investment management responsibilities, this management
consulting institution shall have at least 3 senior managers who have 2 or more years of startup investment experience or other relevant
business experience to undertake the investment management responsibilities. The term “senior managers” as mentioned in the preceding
paragraph refers to the administration personnel who hold the position of vice manager or higher positions or equivalent positions.
Article 10
To go through the archival filing formalities in the administrative department, a startup investment enterprise shall submit the following
documents:
(1)
The articles of association and other legal documents that regulate the organizational procedures and acts of the startup investment
enterprise;
(2)
The photocopies of the industrial and commercial registration documents and business license;
(3)
The name list of the investors, commitments to contributed capital, and certificates for the already paid contributed capital; and
(4)
The name list and resumes of the senior administration personnel. If it entrusts a management consulting institution to be responsible
for its investment management, it shall submit the following documents besides those as listed above:
(1)
The articles of association and other legal documents that regulate the organizational procedures and the acts of the management consulting
institution;
(2)
The photocopies of the industrial and commercial registration documents and business license of the management consulting institution;
(3)
The name list and resumes of the senior administration personnel of the management consulting institution
(4)
The entrusted management agreement .
Article 11
After the administrative department receives an archival filing application of a startup investment enterprise, it shall, within 5
working days, examine whether or not the archival filing application documents are completed, and shall decide whether or not to
accept the application. After it accepts the application, it shall, within 20 working days, examine whether or not the applicant
meets the archival filing requirements and issue to it a written notice of “Archival Filing Completed” or “Archival Filing Rejected”.
If the archival filing application is rejected, the reasons shall be stated in the written notice.
Chapter III The Investment Operations of Startup Investment Enterprises
Article 12
The business scope of a startup investment enterprise is limited to:
(1)
to make startup investments;
(2)
to act as an agent in the startup investment business of other startup investment enterprises or individuals;
(3)
to provide startup investment consulting services;
(4)
to provide startup management services to startup enterprises; and
(5)
to participate in the establishment of startup investment enterprises and startup investment management consulting institutions.
Article 13
No startup investment enterprise may engage in any guaranty business or real estate business except for the purchase of real estate
for its own use.
Article 14
A startup investment enterprise may make investments with its all assets, of which the investments to enterprises shall be limited
to the unlisted enterprises. However, after an unlisted enterprise it invests in gets listed, its unassigned shares as well as the
allocated shares are not subject to this restriction. It can only deposit its other funds in a bank, and use them to purchase government
bonds or other securities with fixed proceeds.
Article 15
A startup investment enterprise may, by signing an investment agreement with the enterprise it invests in, make investments in the
unlisted enterprise by way of its stock rights, preferred stocks, convertible preferred stocks and other quasi stock rights.
Article 16
The investments made by a startup investment enterprise into a single enterprise shall not exceed 20% of its total assets. Article
17 A startup investment enterprise shall, in the articles of association, agreement on entrusted management, and other legal documents,
specify the methods for the calculate and deduct method of management and operational fees, or management consulting expenses of
the management consulting institution, so as to establish a management cost control mechanism.
Article 18
A startup investment enterprise may draw a certain proportion of investment proceeds as performance-based remuneration to the managerial
personnel or to the management consulting institution so as to establish a performance incentive mechanism.
Article 19
A startup investment enterprise may determine a limited time period of existence in advance, but which shall not be less than 7 years.
Article 20
A startup investment enterprise may enhance its investment capacity by way of creditor’s right financing in the scope of the clauses
of the law..
Article 21
A startup investment enterprise shall, in accordance with the relevant enterprise financial and accounting provisions of the state,
establish and improve a sound financial management system and accounting measures.
Chapter IV The Policy Support to Startup Investment Enterprises
Article 22
The state and local governments may establish startup investment direction funds so as to support the establishment and development
of startup investment enterprises by way of holding their shares, providing financing guaranties, etc. The concrete management measures
shall be formulated separately.
Article 23
The state shall adopt tax preferential policies to support the development of startup investment enterprises and direct them to increase
investments to small and medium-sized enterprises, especially the small and medium-sized high and new tech enterprises. The concrete
measures shall be separately formulated by the finance and taxation department of the State Council jointly with other relevant departments.
Article 24
A startup investment enterprise may withdraw its investments by transfer of listed equities, transfer of equities by agreement, repurchasing
by the invested enterprise or by other means. The relevant departments of the state shall actively push ahead the construction of
the multi-level system of market and perfect the investment dropout mechanism for startup investment enterprises.
Chapter V Supervision and Administration over Startup Investment Enterprises
Article 25
A startup investment enterprise and its management consulting institution that have gone through the archival filing formalities in
the administrative department shall, in accordance with the provisions of all the articles in Chapters II and III of these Measures,
carry out investment operations and shall accept the supervision and administration of the administrative department.
Article 26
A startup investment enterprise and its management consulting institution that have gone through the archival filing formalities in
the administrative department shall, within 4 months after the end of each fiscal year, submit their annual financial statements
and business reports audited by certified public accountants to the administrative department, and shall report to it the significant
events during its investment operation course. The “significant events” as mentioned in the preceding paragraph refers to:
(1)
revisions to the articles of association and other important legal documents;
(2)
increase or reduction of capital;
(3)
split-up or merger,
(4)
change of senior management personal or management consulting institution; and
(5)
liquidation and termination of business.
Article 27
The administrative department shall, within 5 months after the end of each fiscal year, conduct an annual inspection over the startup
investment enterprise and its management consulting institution so as to determine whether or not it complies with the provisions
of all the articles in Chapters II and III. Where necessary, it may, within the range as prescribed by the relevant articles of Chapters
II and III, irregularly carry out inspections over its investment operations. If it fails to carry out investment operations by following
the provisions of all the articles in Chapters II and III of these Measures, it shall be ordered by the administrative department
to make corrections within 30 working days. If it fails to make corrections, its archival filing shall be canceled and its new application
for archival filling during the coming 3 years shall be rejected.
Article 28
The administrative departments of all provinces (including sub-provincial cities) shall timely report the information about the archival
filing of startup investment enterprises within their respective jurisdiction to the administrative department of the State Council
and shall, within 6 months after the end of each fiscal year, report the information about the investment operations of the startup
investment enterprises that have been listed in the scope of archival filing administration.
Article 29
The administrative department of the State Council shall strengthen the guidance to the administrative departments of all provinces
(including sub-provincial cities). If any of them fails to fulfill the administrative functions or fails to manage properly, it shall
propose it to make corrections. If any bad consequences are caused, it shall propose it to hold the relevant managerial personnel
liable for their negligence of duties.
Article 30
The startup investment associations shall, according to these Measures, relevant laws, rules and regulations, carry out self-disciplinary
management over the startup investment enterprises and maintain the rights and interests of this sector.
Chapter VI Supplementary Provisions
Article 31
The power to interpret these Measures shall remain with the National Development and Reform Commission jointly with other relevant
departments.
Article 32
These Measures shall come into force as of March 1, 2006.
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