Buy or Sell a Chinese Company | China M&A Advisory | Deep Blue CPA

Buy/Sell Services

The acquisition or sale of a foreign-invested enterprise in China involves complex regulatory procedures, due diligence, valuation, and post-transaction compliance. Whether you are acquiring a WFOE as a going concern, buying out a joint venture partner, or selling your China operations, we provide end-to-end transaction advisory services. Our team coordinates with Chinese legal counsel, tax advisors, and regulators to ensure a smooth transaction.

Transaction Advisory & Structuring

• Share transfer vs asset acquisition analysis
• Transaction structure optimisation for tax efficiency
• Valuation support and financial due diligence coordination
• Negotiation support and heads of terms preparation
• Consideration and payment mechanism structuring

Regulatory Approvals & Compliance

• SAMR (formerly SAIC) registration for share transfer or asset transfer
• MOFCOM approval assessment and filing (if required)
• SAFE foreign exchange registration for cross-border consideration
• Industry-specific regulatory approval (e.g., education, healthcare, technology)
• Anti-monopoly clearance assessment for large transactions

Due Diligence Services

• Financial due diligence on the target company
• Tax compliance review and historical tax risk assessment
• Legal and regulatory compliance review coordination
• Asset and liability assessment including contingent liabilities
• Employee and social insurance compliance review

Post-Transaction Compliance

• Post-transaction restructuring guidance
• Updated business license and registration certificate processing
• Bank account and SAFE registration updates
• Tax registration update and ongoing compliance advisory
• Integration support for operational continuity

Frequently Asked Questions

What is the process for buying a Chinese company as a foreign investor?

The process typically involves: (1) preliminary due diligence and valuation, (2) signing of share transfer agreement, (3) obtaining required regulatory approvals (SAMR, and if applicable, MOFCOM and industry regulators), (4) payment of consideration and SAFE foreign exchange registration, (5) completion of SAMR registration for new shareholder, and (6) post-closing compliance updates. The process takes 3-6 months on average.

Can I buy a WFOE without inheriting its liabilities?

In a share transfer, the buyer acquires the company including all its historical liabilities (known and unknown). An asset acquisition allows the buyer to select specific assets and liabilities, but it is more complex from a regulatory perspective and may trigger additional taxes. We advise on the optimal structure based on your specific circumstances.

What taxes apply to the sale of a Chinese company?

The tax treatment depends on whether the transaction is structured as an equity transfer or an asset acquisition. For equity transfers, the seller is subject to capital gains tax (25% for Chinese resident enterprises, or 10% withholding tax for non-resident foreign sellers, potentially reduced under a tax treaty). Equity transfers are generally not subject to VAT. Asset acquisitions may attract VAT, deed tax, and land appreciation tax in addition to CIT. Stamp duty applies to the transfer agreement at 0.05% of the consideration. We analyse your specific structure to optimise the tax outcome.

Do I need Chinese legal counsel for a China company acquisition?

Yes, independent Chinese legal counsel is essential for transaction structuring, due diligence, regulatory filings, and contract drafting. We coordinate with reputable Chinese law firms to ensure all legal aspects of the transaction are properly addressed while we manage the financial and tax advisory components.

Related Services

• Amendment of Chinese Company — Post-transaction company details update
• China Company Deregistration — Deregistration of acquired or restructured entities
• China WOFE Registration — New WFOE establishment services