After completing two months of private equity due diligence, the 2021 second New Fortune Best Private Equity Selection officially opened the voting channel on June 21, 2021.

Private equity, that is, private equity investment funds, refers to funds raised from qualified investors through non-public offerings and invested in stocks, equities, bonds, futures, options, fund shares and other investment targets stipulated in the investment contract. (such as art, wine, etc.) investment funds, referred to as private equity funds.

Organizational form

Corporate style

Corporate-style private equity funds have a complete corporate structure and their operations are more formal and standardized. Corporate private equity funds (such as "XX Investment Company") can be established relatively easily in China. Semi-open private equity funds can also operate more conveniently in a flexible manner without having to undergo strict approval and supervision, and their investment strategies can be more flexible. For example:

(1) The establishment of an "investment company" whose business scope includes securities investment;

(2) The number of shareholders of the "investment company" Not too much, the amount of capital contribution must be relatively large, not only to ensure the nature of private equity, but also to have a large scale of funds;

(3) The funds of the "investment company" are managed by the fund manager, in accordance with international practice , the manager collects fund management fees and performance incentive fees, and adds them to the operating costs of the "investment company";

(4) The registered capital of the "investment company" is re-registered at a specific time every year Once, a nominal capital increase or share reduction is carried out. If necessary, the investor can redeem its capital contribution once a year at a specific point in time. At other times, investors can transfer equity agreements or Over the counter trading. This "investment company" is essentially a corporate-style private equity fund that can be expanded at any time but redeemed only once a year.

However, corporate private equity funds have a disadvantage, that is, there is double taxation. Methods to overcome the shortcomings include:

(1) Register private equity funds in tax havens, such as Cayman, Bermuda and other places;

(2) Register corporate private equity funds as High-tech enterprises (can enjoy many preferential treatment) and registered in a place with more favorable taxation;

(3) Backdoor, that is, jointly or acquires an enterprise that can enjoy tax preferential treatment during the establishment and operation of the fund (mostly It is better to be a non-listed company) and use it as a carrier.