Jurisdiction - China
Reports and Analysis
China – SAFE Circular On Issues Concerning Foreign Exchange Controls In Encouraging And Guiding The Healthy Development Of Private Investment.

8 August, 2012

 

Legal News & Analysis – Asia Pacific – China – Banking & Finance

 

On June 11, 2012, the State Administration of Foreign Exchange (“SAFE”) issued the Circular on Issues Concerning Foreign Exchange Controls in Encouraging and Guiding the Healthy Development of Private Investment (Hui Fa [2012] No. 33) (国家外汇管理局关于鼓励和引导民间投资健康发展有关外汇管理问题的通知) (汇发[2012]33号) (the “Circular”), which involves critical changes in foreign exchange controls for outbound investment. 
 
The Circular simplifies the procedure of, and eliminates some approval requirements on inward and outward remittance of funds for outbound investment projects. 
 
The Circular also permits Chinese enterprises to use foreign currency loans acquired from domestic banks to finance their outbound investment projects.
 
Further, the Circular allows Chinese individuals to provide a guarantee and/or security to support domestic enterprises’ outbound investment projects, provided a domestic enterprise also provides a guarantee and/or security for the same outbound project. The Circular clarifies that no standalone guarantee or security provided by Chinese individuals in support of such projects is permitted. 
 
For the full text of the Circular, please visit the following Chinese language link:
 
 
For further information, please contact:
 
John Shum, Partner, White & Case  
jshum@whitecase.com 
 
Xiaoming Li, Partner, White & Case
xli@whitecase.com 
 
Baldwin Cheng, Partner, White & Case  
bcheng@whitecase.com
 

 

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