Merger & Acquisitions in State-owned enterprises have been stepped out extensively, which drive more restructuring activities in various industries in China. As a matter of fact, M&A becomes an extremely popular way of economy reforming, industrial upgrading and transformation in the ‘Post Financial Crisis’ era. Foreign capital and domestic fund, state-owned companies and private enterprises have all participated in this grand banquet.

On 26 July 2010, the State Administration of Taxation (SAT) announced the long-awaited Public Notice [2010] No.4 (the "Notice") entitled The Administrative Measures of Corporate Income Tax Treatments for Corporate Restructuring, The Notice provides the detailed guidance on administrative measures and further clarifies certain policy-type technical issues left behind by Circular on Income Tax Treatment of Enterprise Restructuring (CaiShui [2009] No. 59) issued by Ministry of Finance (MOF) and SAT last year. Later on, the State Council promulgated " Opinions on Facilitating the Merger, Acquisition and Corporate Restructuring" (GuoFa [2010] No.27) to extend its strong support on restructuring activities and call for removal of existing barriers under current legal system and regime, then followed by a series of stimulating plans for key industries published by Ministry of Industry and Information and other central government agencies. Hereunder, an M&A storm has come up unusually in 2010. 

Whereas the aforementioned circulars address various aspects of M&A, such as tax incentives, fiscal subsidies, financial aids, technical innovation, capital markets and corporate management. However, the variety and complexity of financial and legal issues always bother and impede the progress of M&A projects commonly in practice.