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As natural persons, Chinese investors in existing domestic enterprises may continue to be shareholders as natural persons of the enterprises after the enterprises are transformed into foreign-invested enterprises because of accepting investment from venture investment enterprises.
This represents a new breakthrough in investment by natural persons. Generally, major laws regarding foreign investment attraction do not contain provisions that allow natural persons to be Chinese investors in foreign-invested enterprises, but in reality, the conditions for natural persons to be Chinese investors of foreign-invested enterprises have been mature. The Regulations on the Administration of Foreign-invested Venture Investment Enterprises make it possible for the original investors as natural persons of a Chinese-invested enterprise to become the Chinese investors of a foreign-invested enterprise.
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