PRC Outward Investment: Liberalization Momentum Builds
In recent years, the government has been making the legal environment governing investment outside China by companies established in China, including foreign-invested companies, more progressive. A new SAFE circular furthers the liberalization programme.
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By Xiaowei (Sherry) Yin, Neal Stender & Jiaolin Song, Coudert Brothers, Hong Kong, Beijing & Shanghai
There are two principal government bodies responsible for overseeing external1 investment by PRC companies: the State Administration of Foreign Exchange (SAFE) and the Ministry of Commerce (MOFCOM).2 SAFE and its local branches are responsible for administration of foreign exchange sourcing, conversion and remittance. After SAFE's examination of foreign exchange sourcing, each outward investment project must be examined and approved by MOFCOM, or by the local department to which MOFCOM has delegated authority. SAFE and MOFCOM have been liberalizing their procedures in a largely similar way, although there are still some inconsistencies.