Research On Dormant Investment Of Foreign Trade System

Since the company system has set up, dormant investment has always been a subject of heavy concern. Issues and problems arising from dormant investment have been solved through theoretical and practical community work together in the domestic capital field. However, foreign dormant investment issues received rarely attention. With the legislative lag and conflicts, foreign dormant investment disputes frequently present. Now the research subject facing by is how to resolve these disputes, balance the interests of different parties, and correctly guide the direction of foreign investment, in order to make it play its due role in the China's market economy. Theory derives from practice and in turn serves practice. The thesis focuses on dormant foreign investment research and proposals of the correspondent system construction.The first chapter mainly elaborates the legal concept of dormant investment. Based on analysis of dormant investors, dormant shareholders and actual controllers of the company, the author initiate judicial definition of dormant investment. Types, characteristics and causes of dormant investment was illustrated through combination of actual cases to get better understanding of the legal concept.The second chapter primarily elaborates the legal validity of dormant investment, especially emphasis on dormant investment agreements and administrative approving which were the basic key factors among the legal validity. The nature of dormant investment agreement has always been controversial. Starting with the non-operational trust system and the non-self-sufficiency agency theory, the thesis eventually return to the entrust theory, the author think dormant investment agreement should be classified as delegate contracts. Meanwhile, the combination of different types and causes on dormant investment was identified for the effectiveness of the agreement. As of the characteristics of dormant investment, administrative approving has been given the high effect. Although the law does not specify, according to the relevant judicial interpretations, foreign equity transfer contract could not entered into force without administrative approving.The effectiveness is very important to the dormant investment agreement, however, the purpose of the investors is to obtain shareholder status, rights and investment income. Therefore, the third chapter describes the dormant investors'status as shareholders. Comparative analysis was used to contrast legislation and practice of Common law and Civil law, then the author analysis abstract principle of shareholders status identification. On this basis, agreements of dormant investment relations generated were described, and leads to specific rules for accreditation of shareholders.The problem has not resolved. Regardless of dormant investors shareholder status whether has been determined or not, conflicts of interests arising from dormant investment still exit. There is conflict of interest, there is conflict need to balance. Chapter four analysis interests balancing arising from dormant investment from the dynamic and static perspective view respectively. Statically, investment agreement itself will generate interests links between significant shareholders, company itself and the other shareholders and creditors of the company. Dynamically, dormant investor's equity would involve into self-punishment and unauthorized disposition of other shareholders, the article analyze interests balancing on this situation from this perspective.Based on the above problems and discussions, chapter five put forward system establishment of dormant foreign investment. Based on the lag and conflicts of law of foreign capital enterprises in China, the author proposal dormant foreign investment should be specified systematically both in legislative and judicial interpretations field which would guide the direction of foreign investment and conducive to China's economic development.