On January 14th 2020, China Banking and Insurance Regulatory Commission (CBIRC) published Implementation Measures of the CBIRC for the Implementation of Administrative Licensing Items concerning Non-Banking Financial Institutions (Consultation Paper), to consult the public for comments. The deadline for feedback was February 13, 2020.

The latest version was mainly revised in three aspects as following: first, to further standardize and strengthen equity management of the non-banking financial institutions, as well as strengthen the coordination among related policies; second, to further implement requirements for the simplified policy and delegated power, meaning to simplify items of examination and approval and to optimize licensing requirements; third, to further perfect the related regulations and to solve newly occurred problems during supervision practice.

As for overseas commercial banks or financial leasing companies as founders, the licensing conditions for the establishment of financial leasing companies in China will be revised within the implementation measures.

1. Basic Conditions

A founder with regard to establish financial leasing company shall meet the following conditions:  

(1) It has bylaws in compliance with the Company Law of the People's Republic of China and the relevant provisions of the CBIRC. 

(2) Its promoters meet the prescribed conditions.  

(3) Its registered capital is monetary capital paid up in a lump sum of, at a minimum, 100 million yuan or an equivalent in freely convertible currencies.

(4) It has directors and senior executives meeting the qualification requirements, and the number of its employees with three years or more of experience in the financial or financial leasing field accounts for not less than 50% of the total number of its employees.  

(5) It has established effective corporate governance, internal control and risk management systems.  

(6) It has established an information technology framework commensurate with its operations and meeting the regulatory requirements, has necessary, safe, and compliant information systems to support its operations, and has technologies and measures that guarantee its continuous operations.

(7) It has business premises, safety protection measures, and other facilities commensurate with its operations.  

(8) Other prudential conditions as set forth in the rules of the CBIRC.

2. Specific conditions for overseas commercial banks

To be a financial leasing company's promoter, a commercial bank registered outside China with an independent legal person status shall meet the following conditions:　

(1) It satisfies the prudential supervision requirements of the regulatory authority of the country or region where it is located.  

(2) It has a good corporate governance structure, an effective internal control mechanism, and a sound risk management system. 

(3) Its year-end total assets in the past year were not less than 80 billion yuan or an equivalent in freely convertible currencies.  

(4) It has a good financial status, with profits earned in the past two fiscal years consecutively.  

(5) It has determined definite development strategies and clear profit modes for the financial leasing company to be formed.  

(6) It abides by the laws and regulations of its place of registration, and has neither been involved in any major case nor committed any serious violation of laws and regulations in the past two years.  

(7) If the promoter is an overseas commercial bank, the financial regulatory authority of the country or region where it is located has established a sound supervision cooperation mechanism with the CBIRC.  

(8) The promoter contributes his or her own capital for shares, and may not contribute capital not owned by him or her, such as funds held as a trustee and debt funds, for shares.  

(9) The balance of equity investment shall not exceed 50% of the net assets of the enterprise (including the current investment amount).

(10) Other prudential conditions as set forth in the rules of the CBIRC.

3. Specific conditions for overseas financial leasing company

To be a financial leasing company's founder, a financial leasing company registered outside China with an independent legal person status shall meet the following conditions:

(1) It has a good corporate governance structure, an effective internal control mechanism, and a sound risk management system. 

(2) Its year-end total assets in the past year were not less than 10 billion yuan or an equivalent in freely convertible currencies.  

(3) It has a good financial status, with profits earned in the past two fiscal years consecutively.  

(4) Its year-end net assets in the past year were not less than 30% of its total assets.

(5) It abides by the laws and regulations of its place of registration, and has neither been involved in any major case nor committed any serious violation of laws and regulations in the past two years.  

(6) The country or region where it is located is in good economic condition.

(7) It contributes its own capital for shares, and may not contribute capital not owned by it, such as funds held as a trustee and debt funds, for shares.  

(8) The balance of equity investment shall not exceed 50% of the net assets of the enterprise. As the dominate shareholder of a financial leasing company, the balance of equity investment shall not exceed 40% of the net assets of the company (including the current investment amount).

(9) Other prudential conditions as set forth in the rules of the CBIRC.

A financial leasing company promoter's capital contribution shall account for not less than 30% of the total equity of the financial leasing company to be formed.