Skip to content

menu

Home - 首页About - 关于金杜Services - 专业领域Contact - 联系我们
English中文
King & Wood Mallesons logo
World Law Group Supreme People’s Court Example Link China Banking Regulatory Commission China Insurance Regulatory Commission China Securities Regulatory Commission General Administration of Customs Ministry of Commerce National Development and Reform Commission Pacific Rim Advisory Council State Administration for Industry & Commerce State Administration of Foreign Exchange RSS LinkedIn Twitter Facebook Weibo
China Law Insight logo
Home » New Regulation of SAFE Simplifies Foreign Exchange Administration of Direct Investment

New Regulation of SAFE Simplifies Foreign Exchange Administration of Direct Investment

By King & Wood Mallesons on December 13, 2012
Posted in Banking & Finance, Corporate

By Ma Feng  and Chen Yun King and Wood Mallesons’ Finance Group

The State Administration of Foreign Exchange (“SAFE”) promulgated on 19 November 2012 the Notice on Further Improvement and Adjustment on the Foreign Exchange Administration Policies of Direct Investment (Hui Fa [2012] No. 59, the “Notice”).The Notice aims to improve the foreign exchange administration on direct investment in China, and abolishes and/or adjusts certain foreign exchange administrative mechanism in that respect.

The changes reflected in the Notice mainly cover the following issues:

1. Abolishing Certain Administrative Procedures of Direct Investment

(1)The Notice has abolished verification procedures for the opening of, transmission into and conversion of the funds in certain foreign exchange accounts under the direct investment.Prior to the incorporation of the foreign invested enterprise, the foreign investor is only requested to register relevant information with SAFE’s system before it could open foreign exchange accounts with PRC banks, and the foreign investor may remit foreign exchange funds into China within the registered amount;

(2)The Notice has abolished the verification procedures for the transfer, purchase and payment of foreign exchange under the direct investment. After a foreign invested enterprise completed its foreign exchange registration with SAFE, it may transfer, purchase and pay foreign exchange directly through PRC banks;

(3)The Notice has abolished the limit on the inter-city account opening for foreign exchange capital account and asset cashing account.SAFE will conduct overall control on the total foreign exchange capitals received by one foreign invested enterprise, whilst it will not limit the quantity of foreign exchange capital accounts opened by such foreign invested enterprise, nor will it limit the capitals remitted into any single foreign exchange capital account opened by such foreign invested enterprise;

(4)The Notice has abolished the verification procedures for foreign investors’ re-investment with their earnings legally obtained in China.Hence, the accounting firms may complete relevant capital verification confirmation procedures in respect of the enterprise to be invested based on its foreign exchange registration information.The Notice has also abolished certain registration and verification procedures in respect of the onshore re-investment by foreign invested investment companies;

(5)The Notice has abolished the existing capital inquiry and confirmation procedures for the capital reduction and capital verification of foreign invested enterprises.

2. Simplifying Current Administration Procedures

(1)The Notice has reduced the types of foreign exchange accounts under the direct investment.Foreign investor’s special foreign exchange account (for acquisition, margin, investment, fee), foreign investor’s special foreign exchange margin account for biding of land and foreign investor’s special foreign exchange margin account for intellectual property transactions have been abolished;

(2)The Notice has simplified the procedures for the foreign exchange capital settlement, the procedures for the domestic re-investment by foreign invested investment companies and the procedures for the capital verification and capital inquiry and confirmation of foreign invested enterprises, by requiring less application materials and shortening relevant work periods.

3. Loosening Restrictions on the Fund Operation under Direct Investment

The Notice has loosened the restrictions on the inter-city purchase and payment of foreign exchange and the restrictions on the source and subject of overseas advance.Pursuant to the Notice, a domestic entity may use the proceeds of domestic foreign exchange loans to make overseas advance, and a foreign invested enterprise may make overseas advance to its overseas shareholder (the amount of which may not exceed the aggregate of the profits distributable to such foreign investor but not actually transferred out of China and the profits distributable but not actually distributed to such foreign investor).

4. Conclusion

The Notice has adjusted in many ways the foreign exchange administration in respect of direct investment, and has abolished 35 administrative verification procedures and simplified or consolidated 14 administrative approval procedures.The adjustments made by the Notice aim to replace the original pre-verification procedures with post-facto registration and filing, to simplify the original administrative procedures and materials, and to strengthen the mechanism of post-facto review and early warning by statistical analysis.It is believed that the Notice would be of great help for the reform of foreign exchange administration mechanism and for the simplification of relevant administrative procedures, and would facilitate the foreign investment and trade in China.

Contacts

For further information on the matters covered in this newsletter, please contact:

BEIJING OFFICE

Ma Feng

40th Floor Office Tower A, Beijing Fortune Plaza

7 Dongsanhuan Zhonglu, Chaoyang District Beijing China

Tel: +86 10 5878 5088

Fax: +86 10 5878 5599

Email: mafeng@cn.kwm.com

SHANGHAI OFFICE

Chen Yun

16-18/F, One ICC, Shanghai ICC,

999 Huai Hai Road (M), Shanghai, China

Tel: +86 21 2412 6052

Fax: +86 21 2412 6350

Email: chenyun@cn.kwm.com

Tags: English, foreign exchange administration, fund operation, Notice on Further Improvement and Adjustment on the Foreign Exchange Administration Policies of Direct Investment, foreign exchange account, SAFE
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Related Posts
中国人民银行《动产和权利担保统一登记办法》评述
December 31, 2021
可持续银行融资简介
October 18, 2021
东莞农村商业银行H股香港主板上市
October 18, 2021
King & Wood Mallesons logo
Our People

Stay Connected – 关注金杜

RSS LinkedIn Twitter Facebook Weibo

Subscribe By Email

Topics – 分类

Archives – 历史文章

RECENT UPDATES – 最近更新

  • “跟随交易”型利用未公开信息交易行为的可罚性探究(上)
  • 以“国家安全”为名丨美国启动232调查对产业链布局及中国企业的影响
  • 跨境破产丨实务管窥:跨境破产合作及案例评析
  • 缄默之契生裂痕——论经营信息商业秘密保护的新难点
  • Chinese Court Found AI-Generated Pictures Not Copyrightable — Convergence with the U.S. Standard?

Links – 友情链接

  • China Banking Regulatory Commission
  • China Insurance Regulatory Commission
  • China Securities Regulatory Commission
  • General Administration of Customs
  • Ministry of Commerce
  • National Development and Reform Commission
  • Pacific Rim Advisory Council
  • State Administration for Industry & Commerce
  • State Administration of Foreign Exchange
  • Supreme People’s Court
  • World Law Group
China Law Insight logo
King & Wood Mallesons logo
RSS LinkedIn Twitter Facebook Weibo
Privacy PolicyDisclaimer

About our Firm

金杜律师事务所(KWM)是一家总部位于亚洲的国际律师事务所。作为全球首家能够在中国、中国香港特别行政区、澳大利亚、英国、美国以及众多欧洲法律领域开展业务的律师事务所,我们在全球最具活力的经济体中拥有深厚的影响力和资源。我们为全球客户敞开大门,帮助他们释放机遇,充分发挥亚洲世纪的潜力。凭借我们卓越的法律专业知识和对中国市场的深入了解,我们为中国及海外客户提供全方位的国内和跨境交易法律咨询服务。

Read More...
Copyright © 2025, King & Wood Mallesons All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo