The Chinese legislation
referring to the registration of investment funds
is similar with the ones available in other regions of the world, such as Europe or United States of America. Investors can set up here open-ended
or closed-ended funds
, which provide different regulations for the amount of shares
that can be issued through the respective fund
. Open-ended funds
were created under the Chinese law
in order to align with the current international trends in terms of investments
and our team of lawyers in China
can offer their legal expertise for the incorporation of this vehicle
Open-ended funds in China
An open-ended fund in China
is incorporated for securities investment
purposes. The investment vehicle
can be registered in China
following the regulations imposed under the Securities Investment Fund Law
, on which our Chinese attorneys
may offer more details.
The main entities involved in the registration of an open-ended fund in China are the following:
, who both invests in the fund
and benefits directly from the respective investment
• the manager of the fund, generally represented by a management company that invests the funds of the vehicle;
• the custodian, that is represented by a recognised bank in China.
As mentioned above, the total volume of the shares issued by the investors is not fixed, unlike the situation of a closed-ended fund. Moreover, the value of the shares can be modified if the investors request so. They can increase the volume of shares and redeem the current value and the procedure can be managed at any time, as there are no specific periods in which the procedure should be performed.
Dividends in an open-ended fund in China
of a company registered in China
or those who are associated in an investment fund
are entitled to receive dividends
. In the case of an open-ended fund
, the shareholders
may receive dividends
in two forms:
• cash dividends;
• fund share dividends.
As a general rule, most of the investors receive money under the first option.