In the news: Offshore accounts launched and the FCPA threat for MNCs

December 06, 2013 | BY

clpstaff &clp articles

The PBOC has given the green light for offshore accounts in the Free Trade Zone and the FCPA threat against multinationals in China is put into perspective

Offshore accounts permitted in trade zone

China Daily reported the announcement from the People's Bank of China (PBOC) that it will permit businesses and individuals to open offshore accounts in the China (Shanghai) Pilot Free Trade Zone. Foreigners will be allowed to open offshore accounts in the Zone and will be treated as local residents for this purpose. Financial institutions in Shanghai can offer offshore accounts through a separate accounting unit for FTZ transactions. There will be no limits on money transfers between offshore accounts in the Zone and overseas accounts.

Source: China Daily

This is a big move for the PBOC as these accounts will be used for cross-border financing, individual investment by Chinese nationals in overseas securities and by foreigners in the domestic capital markets. This is part of a move towards market-determined interest and exchange rates, as well as promoting full convertibility of the renminbi. For foreign companies, this means that they will be exempt from quotas under the Qualified Foreign Intuitional Investor (QFII) system. As with many of the country's regulations, detailed operating rules have yet to emerge.

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