Circular of the State Administration of Foreign Exchange on Promulgating the Administrative Provisions on Foreign Exchange of the Outbound Direct Investments of Domestic Institutions
Circular of the State Administration of Foreign Exchange on Promulgating the Administrative Provisions on Foreign Exchange of the Outbound Direct Investments of Domestic Institutions
Circular of the State Administration of Foreign Exchange on Promulgating the Administrative Provisions on Foreign Exchange of the Outbound Direct Investments of Domestic Institutions
Hui Fa [2009] No. 30
July 13, 2009
The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions and municipalities directly under the Central Government; the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:
For the purposes of carrying out the go-global strategy of development, promoting the healthy development of outbound direct investment of domestic institutions, implementing the balanced management of cross-border capital flows, and safeguarding the basic equilibrium in the balance of payments of China, the SAFE has formulated the Regulations on Foreign Exchange Administration of the outbound direct investment of domestic institutions (hereinafter referred to as the Regulations) in line with the Administrative Regulations of the People's Republic of China on Foreign Exchange and other relevant regulations. The Regulations are herein promulgated and shall take effect as of August 1, 2009. Please comply with the Regulations in handling the relevant businesses.
On receiving this Circular, all SAFE branches and foreign exchange administrative departments shall transmit this Circular in a timely manner to all sub-branches, urban commercial banks, rural commercial banks, and foreign-funded banks under their administration. All Chinese-funded designated foreign exchange banks shall transmit this Circular in a timely manner to the branches under their administration.
Regulations on Foreign Exchange Administration of the Outbound Direct Investment of Domestic Institutions
Chapter I General Provisions
Article 1 With the purposes of promoting and facilitating the overseas direct investment activities of domestic institutions, standardizing the foreign exchange administration of overseas direct investment, and promoting a basic equilibrium in the balance of payments of China, these Regulations are hereby formulated in line with the Administrative Regulations of the People's Republic of China on Foreign Exchange and other relevant regulations.
Article 2 Overseas direct investment as stated in these Regulations refers to acts by domestic institutions wherein the domestic institutions establish or acquire rights or interests outside the territory of China, such as ownership, rights of control or business management rights of existing enterprises or projects by means of establishment (sole proprietorships, joint ventures, cooperative business operations), mergers and acquisitions, equity participation, and so forth after undergoing examination and receiving approval from the overseas direct investment authorities.
Article 3 The State Administration of Foreign Exchange and its branches (hereinafter referred to as the Foreign Exchange Administrations) are responsible for implementing supervision and management over the foreign exchange receipts and payments and the foreign exchange registration arising from the outbound direct investment of domestic institutions.
Article 4 Domestic institutions can make overseas direct investments with self-owned foreign exchange funds, domestic foreign exchange loans in conformity with the regulations, and foreign exchange purchased with RMB or tangible assets, intangible assets, and other foreign exchange assets examined and approved by the Foreign Exchange Administrations. Profits generated from the outbound direct investment of domestic institutions may also be retained overseas for the purpose of overseas direct investment.
Self-owned foreign exchange funds referred to in the preceding paragraph include: foreign exchange funds in foreign exchange accounts under the current account, capital accounts of foreign-invested enterprises, and so forth.
Article 5 The State Administration of Foreign Exchange can make adjustments to the relevant policies concerning the scope of the sources and management modes of the foreign exchange funds for the outbound direct investment of domestic institutions and the overseas retention of profits generated from their overseas direct investment according to the situation in China s balance of payments and the situation in China s overseas direct investment.
Chapter II Foreign Exchange Registration and Outward Remittances of Funds for Overseas Direct Investment
Article 6 The Foreign Exchange Administrations shall carry out a foreign exchange registration and recording system for overseas direct investments of domestic institutions and for assets and relevant rights and interests generated from such investments.
Domestic institutions shall demonstrate the sources of the foreign exchange funds for their overseas investment when registering foreign exchange for overseas direct investment at the Foreign Exchange Administrations in their localities.
Article 7 After undergoing examination and obtaining approval from the overseas direct investment authorities, domestic institutions shall register the foreign exchange for their overseas direct investment at the Foreign Exchange Administrations in their localities with the following materials:
1.
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