On 27 September 2024, Ms. Joyce Zhang, a Contractual Partner at Llinks Law Offices, was invited by the Changning District Commerce Commission, the Changning District Foreign Investment Association, and CCTONG Consulting, to deliver a themed lecture at the Foreign Investment Law Five-Year Transition Policy Seminar held at the Changning District Modern Service Industry Promotion Centre. The lecture was entitled 'Interpretation of the Five-Year Transition Period Policy of the Foreign Investment Law'. The Foreign Investment Law and its Implementation Regulations, which have been in effect since the 1 January 2020, require foreign-invested enterprises to adjust their organisational forms in accordance with the law within a five-year timeframe. Furthermore, with the official implementation of the new Companies Act in July of this year, both domestic and foreign-funded enterprises are faced with the challenge of adjusting their organisational structures and governance documents within the 'five-year transition period'. During her lecture, Ms. Zhang provided prescriptive guidance to the attending corporate representatives on how to successfully complete the adjustment of their organisational structures in compliance with the New Company Law before the year's end.
Ms. Zhang commenced with a concise overview of the basic requirements of the 'five-year transition period' and the consequences for enterprises that fail to complete changes during this period. She then provided a detailed analysis of the key and challenging aspects of enterprise changes during the 'five-year transition period' policy, in conjunction with the relevant provisions of the new Companies Act. Her focus was on four main areas: governance structure adjustments, the enhancement and reassignment of responsibilities and roles of directors, supervisors, and senior executives, flexible profit distribution arrangements in joint ventures, and the issue of foreign shareholders' directed capital reduction and exit. Drawing on her extensive experience in foreign investment and corporate practice, she offered practical advice and strategies, supported by case studies, to assist the attending corporate representatives in thoroughly understanding the practical pathways for enterprise changes under the 'five-year transition period' policy. This guidance is instrumental in helping enterprises align with the requirements of the Foreign Investment Law and the new Companies Act during their transition.
The seminar attracted nearly a hundred corporate representatives from Changning District, representing industries such as communications technology, electrical and electronics, manufacturing, trade, retail, and education, and spanning various functional departments including legal, finance, and human resources. Through professional interpretation and discussion, the themed lecture not only helped participating enterprises to fully comprehend the impact and demands of the 'five-year transition period' policy on corporate governance structure adjustments but also aimed to enhance corporate governance standards, safeguard the interests of enterprises and shareholders, and capitalise on the new opportunities presented by foreign investment regulations and the New Company Law.
