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Volume XIII, Number 158


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June 04, 2023

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People’s Republic of China: First QDLP Managed by WFOE PFM Launched in Shanghai

In 2016, the China Securities Regulatory Commission launched the wholly foreign-owned enterprise private fund manager (WFOE PFM) program to encourage foreign fund managers to make investments in China with money raised in China. With the launching of the first Qualified Domestic Limited Partner (QDLP) fund managed by a WFOE PFM in March 2023, foreign fund managers now have the choice to decide where to invest globally with the funds raised in China.

QDLP is a program developed by local Chinese governments that allows fund managers to invest overseas with money raised in China. It is a quota-based program, under which the amount each QDLP is allowed to make in outbound investments is capped by a quota approved by the State Administration for Foreign Exchange. QDLP was initially introduced in Shanghai in 2012 and subsequently expanded to other localities such as Beijing, Shenzhen, and Hainan.

WFOE PFM is a separate program launched in 2016. Initially it was designed to allow foreign fund managers to raise funds and invest domestically in China.

In 2021, the local government in Shanghai allowed WFOE PFM to apply for the QDLP quota, trying to merge these two schemes. It is believed that such a merger will enable foreign fund managers to optimize the capital structure, as well as human, market, and other resources for their business in China and across the globe. As of 14 March 2023, the first QDLP managed by WFOE PFM was launched in Shanghai. It is a closed-ended bonds investment fund managed by Azimut’s WFOE PFM.

Copyright 2023 K & L GatesNational Law Review, Volume XIII, Number 86

About this Author

Chloe Duan Attorney Finance KL Gates China

Chloe Duan is a partner in the firm's Shanghai office.

Her practice focuses on investment management, venture capital investment, and cross-border M&A. Since 2007, Chloe has advised numerous renowned international financial institutions, unicorns and high technology companies on their cross-border investments.

Chloe is a dual New York/PRC qualified lawyer with experience working in PRC law firms and international law firms.

Grace Ye Shanghai Corporate Transactions Attorney KL Gates

Grace Ye is an associate at K&L Gates' Shanghai office. She is a member of the Mergers and Acquisitions practice group.

Prior to joining the firm Grace practiced in various international law firms advising multinational clients on mergers and acquisitions, joint ventures, foreign direct investments, and general corporate matters, as well as advising Chinese clients on setting up offshore investment funds. Grace also served as the director of strategic development for a technology start-up company in Shanghai. Through this role, Grace led...