According to Hui Fa [2019] No.28, the State Administration of Foreign Exchange undertook the following facilitation measures:

1. Expanding the pilot program of facilitating foreign exchange receipts and payments in trade

China is currently promoting pilot program such as optimizing the examination of foreign exchange receipts and payments under trade in goods, deregistering special re-exchange, and simplifying the inspection of foreign exchange payments for imports according to relevant provisions.

2. Canceling restrictions on domestic equity investments made with capital funds by non-investing foreign-funded enterprises

Non-investing foreign-funded enterprises are permitted to legally make domestic equity investments with their capital funds under the premise that the existing special administrative measures (negative list) for foreign investment access are not violated and domestic investment projects are true and compliant.

3. Expanding the pilot program of facilitating revenue payment under capital accounts

Qualified enterprises in pilot regions are allowed to use revenue under such capital accounts as capital funds, external debts, and overseas listing for domestic payment without providing banks with authenticity certification materials in advance for each transaction.

4. Relaxing the restriction on the use of foreign exchange settlement funds under the capital account

When the transferor of domestic equity under foreign direct investment receives the consideration for equity transfer from a foreign investor, it may complete formalities of account opening, inward remittance and the use of foreign exchange settlement funds directly with a bank by presenting the relevant business registration certificate.

5. Simplifying the balance of payments procedures for small/micro cross-border e-commerce enterprises engaging in sales of goods

Small/Micro cross-border e-commerce enterprises whose annual cumulative amount of foreign exchange receipts or payments for trade in goods is less than US $200,000 (exclusive) may be exempted from the formalities for registration in the “Directory of Enterprises with Foreign Exchange Receipts and Payments for Trade”.

6. Reforming the administration of registration of foreign debts of enterprises

Non-financial enterprises in the pilot regions may complete foreign debt registration formalities with local foreign exchange authorities as per two times the amount of their net assets; and non-financial enterprises may borrow foreign funds within the registered amount, complete the formalities for inward and outward remittance of funds and purchase and settlement of foreign currency directly with a bank, make declaration of international balance of payments as required.

7. Cancelling the restriction on the number of foreign exchange capital accounts to be opened

The market players may open several foreign exchange capital accounts based on actual business needs, provided that the number of relevant accounts opened satisfies the prudential regulatory requirements.

8. Optimizing the method to report foreign exchange businesses for trade in goods

Enterprises may report online their trade credit, trade financing and other businesses through the foreign exchange monitoring system for trade in goods (enterprise end).

9. Relaxing the opening of a to-be-verified account for export revenue

Enterprises’ income from trade in goods upon examination by a bank pursuant to the prevailing provisions may directly enter into the foreign exchange current account or be settled.

10. Promoting the transfer of domestic credit assets to foreign parties under the pilot program

It is allowed to expand the scope of credit assets, including non-performing assets of banks and trade financing.

11. Allowing enterprises contracting projects to carry out the centralized management of their funds overseas

Any enterprise contracting an overseas project may, upon registration with the foreign exchange authorities, open an account for the centralized management of its funds overseas. 

- Team Merbers -

YANG Qi (Angel Young) Partner

E-mail：yangqi@zlwd.com

Ms. Yang’s practice areas are cross-border investment, private equity investment and financial technology.

WANG Lingru Partner

E-mail：wanglingru@zlwd.com

Ms. Wang is expertise is in the construction of transaction structure combining tax, finance and law, as well as M&A and cross-border tax analysis etc.

CAI Yun Partner 

E-mail：caiyun@zlwd.com

She has extensive experiences in financial sector and compliance and risk management of financial products. She is also familiar with government operating system.