State Administration of Foreign Exchange, Issues Relevant to Further Intensifying the Reform of Foreign Exchange Control on Overseas Investment Circular

Issued: October 15 2003
Effective: November 1 2003

Main contents: The approved trial branches of the State Administration of Foreign Exchange may directly issue examination opinions on the source of foreign exchange for overseas investment projects in which the Chinese party's foreign exchange investment is below US$3 million. Authorized sub-branches may also directly issue such opinions for overseas projects in which the Chinese party's foreign exchange investment is below US$1 million (Section One). Upon approval by the trial branches, investors may remit the preliminary capital out of China before the overseas investee enterprise is established. Preliminary capital includes the cost for setting up the overseas enterprise and the contract performance deposit. After the overseas investee enterprise has been registered, the remaining preliminary capital may be directly deposited in the overseas enterprise's account. If the establishment of the overseas enterprise fails, the remaining preliminary capital must be fully remitted back to China within seven days of the resolution to terminate the investment (Section Two). Section Three specifies the additional documents required for acquisition of overseas assets or equity or subscription to the capital increase of established overseas enterprises. Already established overseas investment projects that have not completed the foreign exchange registration should have the subsequent foreign exchange registration completed by May 31 2004.
Related legislation: Issues Relevant to Simplifying the Examination on the Source of Foreign Exchange for Overseas Investment Circular, 2003