Administrative Regulations of the People's Republic of China on Foreign-invested Financial Institutions

Administrative Regulations of the People's Republic of China on Foreign-invested Financial Institutions

Order of the State Council of the People's Republic of China[1994] No.148

February 25, 1994

They are promulgated under the Order of the State Council [1994] No. 148 on February 25, 1994 and shall come into force as of April 1, 1994.

Chapter I General Principles
　
Article 1 These Regulations are formulated in order to meet the needs of opening to the outside world and economic development, strengthen and improve the management of foreign-invested financial institutions.
　
Article 2 Foreign-invested financial institutions mentioned in these Regulations refer to the following financial institutions that are established and operate in China upon approval in accordance with the relevant laws and regulations of the People's Republic of China:
(1) subsidiary banks incorporated by foreign capital whose head offices are in China (hereinafter referred to as foreign banks);
(2) branches of foreign banks in China (hereinafter referred to as foreign bank branches);
(3) banks incorporated jointly by foreign and Chinese equity institutions (hereinafter referred to as equity joint-venture banks);
(4) finance companies incorporated by foreign capital whose head offices are in China (hereinafter referred to as foreign finance companies); and
(5) finance companies incorporated jointly by foreign and Chinese financial institutions (hereinafter referred to as equity joint-venture finance companies).
The State Council determines the locations that are open to foreign-invested financial institutions.
　
Article 3 Foreign-invested financial institutions shall abide by the laws and regulations of the People's Republic of China, and shall not engage in activities that harm the social and public interests of the People's Republic of China.
The legitimate business operation and lawful rights and interests of the foreign-invested financial institutions shall be protected by the laws of the People's Republic of China.
　
Article 4 The People's Bank of China is the sole regulatory authority responsible for the regulation and supervision of the foreign-invested financial institutions; the branches of the People's Bank of China exercise routine regulation and supervision of the foreign-invested financial institutions in their jurisdiction.

Chapter II Establishment and Registration
　
Article 5 The minimum registered capital for a foreign bank or an equity joint-venture bank shall be in amount of a freely convertible currency equivalent to CNY 300 million yuan; and that for a foreign finance company or an equity joint-venture finance company shall be in amount of a freely convertible currency equivalent to CNY 200 million yuan, of which, the paid-up capital shall not be below 50 percent of the registered capital.
The head office of a foreign bank branch shall allocate a working capital in a freely convertible currency equivalent to no less than CNY 100 million yuan to its branches without any repayment or recompense.
　
Article 6 The applicant for the establishment of a foreign bank or a foreign finance company is subject to the following conditions:
(1) the applicant is a financial institution;
(2) the applicant has maintained a representative office in China for two years or longer;
(3) the total assets of the applicant at the end of the year prior to its application are not be below US $ 10 billion; and
(4) there is a sound system for financial regulation and supervision in the home country or region of the applicant.
　
Article 7 To establish a foreign bank branch, the applicant is subject to the following conditions:
(1) the applicant has maintained a representative institution in China for two years or longer;
(2) the total assets of the applicant at the end of the year prior to the application shall not be below US $ 20 billion; and
(3) there is a sound system for financial regulation and supervision in the home country or region of the applicant.
　
Article 8 To establish an equity joint-venture bank or equity joint-venture finance company, the applicant is subject to an the following conditions:
(1) each partner to the joint-venture is a financial institution;
(2) the foreign partner has a representative institution in China;
(3) the total assets of the foreign partner at the end of the year prior to the application are not be below US $ 10 billion; and
(4) there is a sound system for financial regulation and supervision in the home country or region of the applicant.
　
Article 9 The applicant for the establishment of a foreign bank or a foreign finance company shall submit to the People's Bank of China a written application together with the following documents:
(1) a letter of application specifying: the name of the foreign bank or finance company to be set up, the registered capital and paid-up capital, the intended business activities, etc.,
(2) a feasibility study;
(3) the articles of association of the intended foreign bank or finance company;
(4) a photocopy of the business license issued by the relevant regulatory authorities of the country or region in which the applicant is incorporated;
(5) the annual reports of the applicant for the last three years; and
(6) other documents required by the People's Bank of China.
　
Article 10 To establish a foreign bank branch, the head office of the foreign bank shall submit to the People's Bank of China a written application together with the following documents:
(1) the application signed by the legal representative specifying: the name of the branch to be set up by the foreign bank, the amount of working capital free from repayment allocated by the parent company, the intended business activities, etc.;
(2) a photocopy of the business license issued by the relevant regulatory authorities of the country or region in which the applicant is incorporated;
(3) the annual reports of the applicant for the last three years; and
(4) other documents required by the People's Bank of China.
　
Article 11 To establish an equity joint-venture bank or a finance company, the partners to the equity joint-venture shall submit to the People's Bank of China a jointly written application together with the following documents:
(1) the application for the establishment of an equity joint-venture bank or a finance company specifying: the name of the intended equity joint-venture bank or finance company to be set up, the names of all the partners to the joint-venture, the amount of the registered capital and paid-up capital, the proportion of the capital contributions of all parties to the joint-venture, the intended business activities, etc.;
(2) a feasibility study;
(3) the contract for the equity joint-venture and the Articles of Association of the joint venture bank or finance company to be set up;
(4) a photocopy of the business licenses issued by the relevant regulatory authorities of the country or region in which the applicants are incorporated;
(5) the annual reports of the applicants for the last three years; and
(6) other documents required by the People's Bank of China.
　
Article 12 Except the annual reports, all documents required in Article 9, Article 10 and Article 11 hereof, if written in a foreign language, shall have a Chinese translation attached.
　
Article 13 The applicant shall be given a formal application form when the People's Bank of China approves the application for the establishment of a financial institution with foreign capital after preliminary examination.
The application shall be considered rejected if the applicant fails to receive the formal application form within 90 days from the date of application.
　
Article 14 The applicant shall, within 60 days from the date of receiving the formal application form, present to the People's Bank of China the completed form and the following documents for ratification:
(1) a list of the key executives of the intended financial institution with foreign capital and their resumes;
(2) a power of attorney granted to the key executive officer of the intended financial institution with foreign capital;
(3) in case of applying for setting up a foreign bank branch, a letter of guarantee from the head office specifying the responsibility for the tax and debt obligations incurred by the foreign bank branch; and
(4) other documents required by the People's Bank of China.
　
Article 15 The financial institution with foreign capital shall, within 30 days from the date of receiving the approval document of the People's Bank of China, raise and transfer to China the required paid-up capital or working capital, and then register with the industry and commerce administration authorities in accordance with law after the transferred capital is verified by a certified public accountant registered in China.
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