Jurisdiction - China
Reports and Analysis
China- SAFE Simplifies Foreign Exchange Control On Overseas Investment.

5 July, 2012

 

Legal News & Analysis – Asia Pacific – China – Regulatory & Compliance

 

On June 11, 2012, the State Administration of Foreign Exchange (“SAFE”) issued the Notice on Relevant Foreign Exchange Control Issues Concerning Encouraging and Guiding the Healthy Development of Private Investment, which took effect on July 1, 2012. The notice simplifies the process for remission of funds from an offshore company to its domestic parent company. MOFCOM requires domestic companies to provide details of the registered capital/equity investment and total investment (being the total amount of equity plus loans or other non-equity investments) of companies to be established overseas. Under the notice, SAFE permits domestic enterprises to directly remit back the balance between total investment and registered capital from overseas, without going through any registration procedure for capital reduction or withdrawal. Only an amendment registration procedure is required. The notice also permits domestic enterprises to use their domestic foreign exchange loans for overseas lending. In addition, the notice permits domestic individuals to act as a joint guarantor in guarantees for overseas debt.

 

The full Chinese text of the notice is available here.  

 

 

For further information, please contact:

 

Elizabeth Cole, Partner, Orrick

ecole@orrick.com
 
Thomas Man, Partner, Orrick
tman@orrick.com
 
Brad Herrold, Orrick
bherrold@orrick.com
 
Veronica Lockyer, Orrick
vlockyer@orrick.com
 
Yan Zeng, Orrick
yzeng@orrick.com
 

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