New Circular deregulates foreign exchange controls
December 14, 2012 | BY
clpstaffA new Circular from the State Administration of Foreign Exchange has reduced the approval burden on the capital account, a move that will boost investor confidence by showing a renewed commitment to liberalising foreign exchange controls
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The State Administration of Foreign Exchange (SAFE) released the Circular on Further Improving and Revising the Foreign Exchange Control Policy on Direct Investment (国家外汇管理局关于进一步改进和调整直接投资外汇管理政策的通知) on November 19. It became effective on December 17.
The Circular removes many of the previous layers of approval foreign-invested enterprises (FIEs) were subject to when incorporated in China. For the first time, it also permits FIEs to lend to their headquarters an amount equalling the profits owed to them.