Funds and Asset Management in China

Funds in China at a glance

Funds in China fall into three broad markets. The first is private funds: private equity, venture capital and private securities funds raised from qualified investors and managed by firms registered with the Asset Management Association of China (AMAC). The second is publicly offered securities investment funds, sold to retail investors by licensed fund management companies under the Securities Investment Fund Law. The third is the wider asset management industry run by banks' wealth management subsidiaries, securities firms, trust companies, insurance asset managers and futures firms.

For international participants the questions are usually practical. Can a foreign sponsor manage an onshore RMB fund? How should a USD fund invest alongside RMB capital? What does a global manager need to distribute products or invest through the qualified investor schemes? And how should Chinese managers, family offices and institutions deploy capital abroad? The answers depend on which regulator is responsible, which channel is used and how the onshore and offshore parts of a structure interact.

Capital raising has shifted decisively towards RMB. State-guided funds, insurers, bank-affiliated investment vehicles and listed corporates have become the main sources of onshore private capital, while USD fundraising for China-focused strategies is more selective than it was a decade ago. Many sponsors now run parallel vehicles, and many investors combine primary commitments with secondaries and co-investment.

Regulating funds in China: the framework

The China Securities Regulatory Commission (CSRC) supervises fund managers and funds, while AMAC acts as the self-regulatory body that registers private fund managers, records private funds and enforces industry standards. Banking and insurance asset managers are supervised by the National Financial Regulatory Administration (NFRA), which replaced the former banking and insurance regulator in 2023. Cross-border flows are overseen by the State Administration of Foreign Exchange (SAFE) and the People's Bank of China (PBOC).

The cross-sector Guiding Opinions on Regulating the Asset Management Business of Financial Institutions, issued in April 2018, set common rules for asset management products across the industry on leverage, multi-layer nesting, guaranteed returns and net-value management. Their transition period ended at the end of 2021, and they remain the reference point when regulators assess whether a product structure is acceptable.

The full texts of national laws are available on the NPC national law database, and AMAC publishes its rules and registration guidance on the AMAC website. Regulation of private funds in China is now more rule-based than before 2023, but AMAC still exercises considerable judgement when it reviews registrations and filings.

Who supervises which institutions

• CSRC and AMAC: private fund managers and funds, public fund management companies, securities and futures firms' asset management subsidiaries, and fund distributors and service providers.
• NFRA: banks and their wealth management companies, trust companies, insurers and insurance asset management companies, and financial asset investment companies set up by large banks.
• PBOC and SAFE: cross-border fund flows, foreign exchange registration, the interbank bond market and macro-prudential oversight of asset management products.
• Local financial regulatory bureaus: QFLP and QDLP pilots, local fund incentives and, in practice, the first line of contact for many sponsors setting up in a city.
• State-owned asset authorities and finance departments: government guidance funds and the investment of state capital, including rules on returns, investment areas and exits.

Because responsibilities are split, one fund project can involve several authorities. A QFLP fund backed by a guidance fund, for example, will deal with the local financial bureau, the local SAFE branch, AMAC and the guidance fund's own approval process.

Developments in 2025 and 2026

The period since the private fund regulations came into force has been one of steady rule-making rather than a single reform. The direction is consistent: tighter entry standards for managers, more disclosure, closer monitoring of fund data, and encouragement for long-term and technology-focused capital.

• Private fund disclosure. In February 2026 the CSRC issued the Measures for the Supervision and Administration of Private Investment Fund Information Disclosure as CSRC Order No. 233, effective 1 September 2026, raising disclosure to the level of a departmental rule rather than self-regulatory guidance.
• Fundraising rules. In September 2026 the CSRC consulted on draft measures on the supervision of private fund fundraising, covering investor suitability, sales channels and promotion.
• Fund-of-funds. In October 2026 the CSRC released draft provisions on private investment fund-of-funds, a sign that it wants a dedicated framework for the largest pools of RMB capital, including government guidance funds.
• Public funds. Following the CSRC's May 2025 action plan for the high-quality development of public funds, which promoted fees linked to performance and greater use of performance benchmarks, the CSRC brought new sales fee rules into force on 1 January 2026 and performance benchmark guidelines on 1 March 2026, and in October 2026 consulted on revised public fund operation measures.
• Data and monitoring. Reports in October 2026 indicated that the CSRC plans a fund industry operation monitoring centre to register private fund units and collect public and private fund data.
• Cross-border enforcement. In May 2026 eight authorities led by the CSRC issued an implementation plan against illegal cross-border securities, futures and fund business, which affects offshore managers that market to mainland investors.
• Venture capital policy. The State Council General Office's June 2024 policy measures on venture capital encouraged long-term capital, secondary funds and more exit channels, themes that continue to shape local fund policy.

Taken together, these changes mean that managers of investment funds in China should expect regulators to see more of their data, more quickly. The October 2026 reports on a monitoring centre cited an analyst estimate that public funds and private securities funds together hold assets of nearly RMB 50 trillion, with data currently spread across exchanges, custodians and industry bodies. A single registry of private fund units would make inconsistencies between filings, investor records and actual holdings far easier to detect.

For international groups, the practical response is to align onshore reporting with group compliance, keep investor records clean and assume that any statement made to AMAC or investors can be cross-checked.

Several of these instruments were still in draft at the time of writing, so final thresholds and transition periods should be checked before decisions are taken. For a wider view of financial regulation in the period, see financial regulation in China: 2026 review.

Cross-border routes for funds in China

Inbound capital

Foreign capital reaches Chinese assets through several channels. Offshore USD funds invest into offshore holding companies or, where the target is onshore, through foreign direct investment subject to the negative list. Foreign sponsors can establish wholly foreign-owned private fund managers onshore and register with AMAC, which lets them raise and manage RMB funds from domestic qualified investors. Qualified Foreign Limited Partner (QFLP) pilots in cities such as Shanghai, Beijing and Shenzhen let foreign investors contribute foreign currency into onshore funds that convert and invest in RMB.

For listed securities and bonds, the QFII and RQFII regime, the China Interbank Bond Market and the Stock and Bond Connect schemes provide access. Since 2020, investment quotas no longer apply to QFII and RQFII, although foreign shareholding limits in listed companies still do.

Outbound capital

Chinese investors use Qualified Domestic Limited Partner (QDLP) and Qualified Domestic Investment Enterprise (QDIE) pilots, outbound direct investment procedures, the QDII scheme for institutional and public products, and Hong Kong platforms. Chinese sponsors managing international capital commonly use Hong Kong limited partnership funds, open-ended fund companies and Cayman vehicles.

Hong Kong, the US, the EU and ASEAN

Hong Kong is the main hub linking investment funds in China with global investors: its limited partnership fund regime has applied since 31 August 2020, its profits tax exemptions for qualifying funds and carried interest concession support local management, and mutual recognition of funds and Wealth Management Connect link it to mainland retail channels. In the United States, rules on outbound investment in certain Chinese technology sectors, effective since 2 January 2025, now feature in fund diligence and side letters for China-focused strategies. European investors focus on sustainability disclosure, sanctions screening and the EU's growing economic security toolkit. Singapore and other ASEAN hubs host managers that invest in China alongside regional strategies and increasingly serve as bases for Chinese managers going abroad.

Our practice areas for funds in China

Our work in this area is organised around the following topics, each of which has its own detailed guide:

• RMB and USD fund formation: choosing between onshore limited partnerships, offshore vehicles and parallel structures, and negotiating limited partnership agreements and side letters.
• Fund manager registration with AMAC: the conditions for registering a private fund manager, including foreign-invested managers, and how AMAC reviews applications.
• Private fund operations and compliance: fundraising and suitability, fund filing, investment restrictions, disclosure, related-party transactions and inspections.
• QFLP, QDLP and QFII schemes: the pilot and national programmes that connect foreign and domestic capital with onshore and offshore markets.
• LP investments, secondaries and continuation funds: primary commitments, fund interest transfers, GP-led processes and the onshore secondary platforms.
• GP stake transactions: minority and control investments in fund managers and the AMAC and change-of-control issues they raise.
• Fund tax structuring: partnership tax transparency, venture capital incentives, VAT on asset management products and cross-border tax for foreign investors.
• Public securities investment funds: licensing and ownership of fund management companies, product rules, fee reform and mutual recognition.
• Institutional asset and wealth management: bank wealth management companies, securities and insurance asset management, pension products and cross-border wealth channels.

Related topics include fund finance, real estate funds and PE exits.

Choosing a structure and avoiding common mistakes

Most projects involving funds in China turn on a handful of decisions that should be taken early, because changing them later is costly.

• Currency and investor base. Where the anchor investors are domestic institutions or state-guided funds, an onshore RMB vehicle is usually required; where investors are international, an offshore fund with a China investment route is more natural.
• Manager location and licensing. Running RMB funds requires an AMAC-registered manager onshore; offshore managers need appropriate licences in Hong Kong, Singapore or elsewhere, and must avoid marketing to mainland investors in ways that onshore rules treat as unlicensed activity.
• Asset class and route. Listed securities, bonds, private equity and real estate each have different access channels, foreign investment restrictions and foreign exchange treatment.
• Tax. The choice between partnership and company vehicles, and between onshore and offshore funds, has direct consequences for investors' tax and the treatment of carried interest.
• Governance and conflicts. Parallel funds, co-investment vehicles and continuation funds need allocation policies, advisory committee procedures and conflict rules that work under both onshore and offshore documents.
• Exit. Listing rules, share reduction restrictions and foreign exchange controls affect how and when value can be realised and returned to investors.

A worked example

Consider a European healthcare investor that wants to back Chinese biotech companies with both international and domestic capital. A typical plan would combine an offshore fund for international investors, investing through offshore holding companies where targets use red-chip structures, with an onshore RMB fund managed by a newly registered foreign-invested manager to take commitments from a local government guidance fund. Each investment would then be allocated between the two funds under a written policy, with the RMB fund taking stakes in onshore companies and sectors where foreign capital faces restrictions.

The sequence matters: incorporate and register the onshore manager first, agree guidance fund terms in parallel, and only then fix the allocation policy and fee offsets, since guidance funds often require local investment ratios that affect which deals the RMB fund can take.

Typical timeline for an onshore launch

1. Agree the platform design: onshore manager, onshore fund, any offshore parallel fund and the allocation policy.
2. Incorporate the manager, inject capital, hire senior staff and adopt compliance policies.
3. Apply for AMAC registration with a legal opinion from a licensed PRC law firm and answer AMAC's questions.
4. Negotiate fund documents with anchor investors, including any government guidance fund approvals.
5. Establish the fund vehicle, open custody and bank accounts and complete the first close.
6. File the fund with AMAC within 20 working days after fundraising is completed, then begin investing.

An offshore parallel fund can run on its own timetable, but its documents should be finalised only once the onshore terms are settled, so that allocation, fee offsets and investor rights match across both vehicles. The registration step is usually the least predictable, which is why experienced sponsors start it before fundraising conversations become detailed.

Common mistakes

How TRW & Co helps

We help international sponsors, investors and Chinese managers design and run fund structures that connect China with global capital. Our work covers structuring parallel RMB and USD funds, drafting and negotiating fund documents governed by the laws of jurisdictions in which our lawyers are qualified, side letter and investor negotiations, QFLP, QDLP and qualified investor strategies, GP stake and secondary transactions, and project management across sponsors, administrators and tax advisers. We explain how the Chinese regulatory environment affects each step. Where PRC legal advice is required, including AMAC legal opinions, regulatory filings and PRC law documentation, we work with licensed PRC law firms and coordinate their input within one team. To discuss a fund project, contact us.