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Clifford Chance

Clifford Chance


New rules extend opportunities for foreign private equity in Shanghai (English version)

19 January 2011

Rules issued in late December offer further clarity on the opportunities for
foreign private equity (PE) fund managers and their investors in Shanghai.

The new rules, the latest opening up of Shanghai's nascent PE industry to
foreign capital, offer a stronger regulatory framework for the launch and
management of onshore Renminbi (RMB) funds and may make it easier for
qualified foreign investors to convert foreign currency into RMB for onward

However, while offering a welcome upgrade to the regime for foreign PE
investors, considerable uncertainty remains as to how foreign-invested RMB
funds will actually be able to operate in practice and how their activities may be
treated outside the Shanghai area.

The briefing explains the background to the changes, the new opportunities
available, and explores some of the grey areas that remain in the regulation and
its likely operation.

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