Regional headquarters and inter-company loans

December 18, 2008 | BY

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Lin [email protected] municipality recently announced its Provisions on Encouraging the Establishment of Regional Headquarters…

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Lin Lin

KhattarWong

Shanghai municipality recently announced its Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations (上海市鼓励跨国公司设立地区总部的规定) (Provisions) to further encourage the establishment of regional headquarters in Shanghai. This has opened up new areas of activity for regional headquarters, including the centralisation of their internal capital management.

Inter-Company Loan Restriction

According to theGeneral Provisions on Lending, inter-company loans are prohibited in China, even if the lender and the borrower are within the