SAFE

China eases restrictions on the currency control system

On March 30, 2015, the Chinese State Administration of Foreign Exchange (SAFE) issued Circular 19 related to the currency controls system. The measures will come into effect on June 1, 2015. The new regulation facilitates restrictions on the currency control system which is likely to boost foreign investments.

Major updates:

Companies will be able to inject capital with a qualified bank in the area where the business is incorporated without registering with the local SAFE bureau before.

China loosens control on outbound securities

In a circular published in May, the State Administration of Foreign Exchange (SAFE) further continued its move towards less regulation and more supervision. The Foreign Exchange Administration Rules on Cross-border Security (Hui Fa [2014] No. 29) simplifies the use of outbound securities. The new rules have taken effect last June. Three categories have been set up by SAFE to distinguish the different kinds of securities, depending on the localization of its obligor, creditor and provider.

Notice 715: SAFE eases foreign exchange regulations

The State Administration of Foreign Exchange (SAFE) has released “Notice 715” simplifying the conversion of foreign currency in registered capital into Renminbi in the 16 pilot zones. Those zones, including areas such as Zhonguancun in Beijing, Binhai in Tianjin or Suzhou Industrial Park, aim at further connect technology and finance. This notice came into force on August 4th and may well ease the way companies manage their funds.

Important Reform of Foreign Exchange Administration System for Trade in Goods

On Dec 01, 2011 China rolled out a pilot reform of its foreign exchange control system for international trade in goods in pilot regions including Jiangsu, Shandong, Hubei, Zhejiang (excluding Ningbo), Fujian (excluding Xiamen), Dalian, and Qingdao. 

RMB Reinvestments through Chinese Holding Companies

On December 8, 2011, the Ministry of Commerce (MOFCOM) and State Administration of Foreign Exchange (SAFE) issued the circular Shangzihan [2011] No. 1078 (Circular 1078), which sought to clarify issues relating to the use of RMB income by Chinese Holding Companies (CHCs) to reinvest in existing subsidiaries or establish new companies in China.

We examine Chinese Holding Companies as a vehicle for foreign investment and outline how the new regulations will affect their operation.

Controls on Foreign Investment Tightened

--New measures aimed at controlling hot money flows--

The State Administration of Foreign Exchange (SAFE) and the Ministry of Commerce (MOFCOM) have issued a new regulation governing the supervision of foreign investment companies in China, according to an announcement on the MOFCOM website this Monday.

Shanghai foreign exchange controls on remittance of cost reimbursement items

In December 2010, the Shanghai Foreign Exchange Authority (SFEA), a branch of the State Administration of Foreign Exchange (SAFE), released a circular that relaxed FOREX control requirements on cross-border payments of reimbursements and other allocated expenses.

Shanghai eases forex controls on remittance of cost reimbursements

BUSINESS BRIEF -- MAY 2011

In December of 2010, the Shanghai Foreign Exchange Authority (SFEA), a branch of the State Administration of Foreign Exchange (SAFE), announced a change in FOREX control requirements on cross-border payments of reimbursements and other allocated expenses, through the issuance of Shanghai Hui Fa [2010] 192 (“Circular 192”).

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