Let’s say two overseas enterprises (Company A and Company B) team up to establish a third enterprise (Company C) in Qianhai. If Company A is a shareholder in Company B and wishes to transfer its equity to Company B will the two entities be allowed to determine the consideration of such equity upon mutual agreement between themselves? Also, will there be any requirements on such transfers between Related Companies?
Updated:2014-12-16
Determining considerations upon agreement is prohibited. Considerations must be determined through an appraisal via an Asset Evaluation Institutions. There are, however, no specific requirements governing transfers between related companies.