How to participate in the "equity incentive plan" of overseas listed companies in PRC
On the 2012.03.16, State Administration of Foreign Exchange("Safe") issued Notice to allow domestic public individual by own foreign exchange in foreign currency accounts, RMB or other domestic legitimate money to participate in the equity incentive plan; Notice of the State Administration of Foreign Exchange on domestic public individuals to participation of equity incentive plan of overseas listed companies.
The “equity incentive plan” in the Notice refers to the overseas listed company take the corporation's own stock as objective to execute the equity incentive plan on the directors , supervisors, senior management, or other employee who have the employment or labor relations with Domestic Company. The plans could be Employee Stock Owner Plans, Stock Option Plan or other equity incentive measures permitted by the laws and regulation.
Domestic Company refer to overseas listed enterprise registered in PRC, the branch(including Representative Office) of overseas listed enterprise registered in PRC and holding company, subsidiaries or partnership enterprise of overseas listed enterprise registered in PRC.
Domestic public individual refer to the directors, supervisors, senior management and other employees, Chinese nationals (Including Hong Kong, Macao and Taiwan) and foreign individual which are stipulated by Article 52 0f the Foreign Exchange Regulations of the Peoples Republic of China.
According to the Notice, the individual who participate in the equity incentive plan of overseas listed company should through their domestic company unifiedly consign a domestic agent firm for the operations of the foreign currency registration, accounts opening, funds transfer/remittance and consign a overseas firm for handling the procedure such as vesting, buy/sell the stock or right and funds transfer.
Our analyses and suggestions:
The “equity incentive plan” involves foreign exchange, bank operation and many professional fields, so if you and your company need agent support in“equity incentive plan”, you could contact us, Shanghai Dongjin Business Consulting on this issue. We could arrange domestic agent operation for you.