Private Equity Funds in China - New Opportunities, New Challenges

The investment potential that China offers private equity investors has attracted interest from both the industry’s large established players, as well as a number of focused new private equity firms. With the increase in interest – both domestic and international – in various industries and target companies suitable for private equity style investments, China has recently updated its relevant tax and legal framework for the structuring and operation of private equity funds. These changes create the potential for both onshore and offshore funds to compete and succeed in the increasingly competitive market for growth and expansion capital in China.

Yingxi Fu-Tomlinson, a Partner in our Shanghai office, works frequently with offshore private equity firms on deals involving China and is intimately familiar with China's emerging onshore RMB private equity industry and regulatory framework. She led a discussion of the new legislation, identify pitfalls, and analyze potential opportunities for non-Chinese private equity firms to structure and launch effective funds. Gary J. Gartner, a Partner in our New York office, has extensive experience in international taxation issues. He discussed the tax implications for onshore and offshore investors within the new Chinese legal framework.