By King & Wood Mallesons’ Finance Group

In May 2010, the State Council issued the Opinions on Encouraging and Guiding the Healthy Development of Private Investment (Guo Fa [2010] No.13) to promote private investment activities . In order to solve the difficulties faced by private companies in terms of overseas financing and the lack of liquidity, and to simplify the foreign exchange control policies for outbound investment activities by private companies, SAFE released new rules on private outbound investments, the Circular of State Administration of Foreign Exchange on Foreign Exchange Administration in Relation to Encouraging and Guiding the Healthy Development of Private Investment (Hui Fa [2012] No.33) (the “Circular”) on 11 June 2012. The Circular simplifies the regulation processes for the remittance of foreign direct investment capital as well as offshore loans[1]  granted by domestic enterprises and relaxes the administration of  external security provided by individuals.

The Circular’s main content includes:Continue Reading Safe New Rules to Boost Private Outbound Investment


《通知》的主要内容包括:Continue Reading 外管局新规则助力民间境外投资进一步发展

On June 9, 2009, the State Administration for Foreign Exchange (“SAFE”) issued the Notice on Certain Issues Relating to Foreign Exchange Administration on Offshore Lending by Domestic Enterprises (the “Notice”) effective as of August 1, 2009, in an effort to deal with the difficulties faced by offshore Chinese-funded enterprises that have “gone abroad” in obtaining financing offshore and increasing working capital, to encourage more domestic enterprises with strong capital strength to “go abroad”, and to enhance the use of funds by domestic enterprises.

King & Wood’s Finance Group

 Continue Reading SAFE Circular to Improve Forex Administration on Offshore Lending

From 2003-2007, over US$100 billion poured into China via offshore structures in tax havens like the Cayman Islands. Much came from global institutional investors who tasked alternative investment managers with allocating a percentage of their portfolios to high-yield opportunity funds, emerging markets and real estate.

Everyone wanted a piece of the “China Dream,” but in recent months they have woken up to deteriorating economic conditions. Institutional investors are forcing redemptions of their investments from high-yield, high-risk markets.

Jack Rodman, Senior Advisor to King & Wood\‘s International Debt/Restructuring Practice

Summarized from Mr. Rodman’s article for China Economic Review, May 2009.Continue Reading The Best of a Bad Deal