Circular on Issues Relevant to Foreign Exchange Control with Respect to the Round-trip Investment of Funds Raised by Domestic Residents Through Offshore Special Purpose Companies
关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知
The Circular allows domestic residents to set up offshore financing platform by means of special purpose companies and to participate in various equity financing activities through reverse acquisition, equity transfer, convertible bonds in international financial market. The Circular also stipulates the relevant registration and administration procedures for special purpose companies and remittance of profits, dividends, liquidation proceeds, equity transfer proceeds, and capital reduction proceeds.
Repealed on July 04 2014: http://www.chinalawandpractice.com/Article/3379499/Circular-on-Issues-Relevant-to-Exchange-Control-in.html
(Issued by the State Administration of Foreign Exchange on October 21 2005 and effective as of November 1 2005.)
(国家外汇管理局于二零零五年十月二十一日发布，自二零零五年十一月一日起实施。)
Hui Fa [2005] No.75
Branches and offices of the State Administration of Foreign Exchange of each province, autonomous region and municipality directly under the central government and the Shenzhen, Dalian, Qingdao, Xiamen and Ningbo municipal branches of the State Administration of Foreign Exchange:
汇发 [2005] 75号
With a view to encouraging, supporting and guiding the development of non-publicly owned economic sectors, further improving the venture investment policy support system and regulating cross border capital transactions involved in the investment and financing activities conducted through offshore special purpose companies by domestic residents, and pursuant to the PRC Foreign Exchange Control Regulations, the Measures for Exchange Control for Investments Outside China and the Tentative Provisions for Acquisition of Domestic Enterprises by Foreign Investors, we hereby notify you on issues relevant to foreign exchange control in respect of the round-trip investment of proceeds derived by domestic residents from equity financing exercises conducted through offshore special purpose companies as follows:
国家外汇管理局各省、自治区、直辖市分局、外汇管理部，深圳、大连、青岛、厦门、宁波市分局：
1. For the purposes of this Circular, the term 'special purpose company' means an offshore enterprise directly established or indirectly controlled by a domestic resident legal person or a domestic resident natural person for the purpose of conducting offshore equity financing (including convertible bond financing) exercises with the domestic enterprise assets or equity interest that it/he/she owns.
为鼓励、支持和引导非公有制经济发展，进一步完善创业投资政策支持体系，规范境内居民通过境外特殊目的公司从事投融资活动所涉及的跨境资本交易，根据《中华人民共和国外汇管理条例》、《境外投资外汇管理办法》、《外国投资者并购境内企业暂行规定》，现就境内居民通过境外特殊目的公司开展股权融资及返程投资涉及外汇管理的有关问题通知如下：
For the purposes of this Circular, the term 'round-trip investment' means direct investment activities in China conducted by a domestic resident via a special purpose company, and includes but is not limited to the following methods: purchasing or swapping for the equity of a Chinese party in a domestic enterprise, establishing a foreign-invested enterprise in China and through such enterprise purchasing or reaching agreement to control domestic assets, purchasing through agreement domestic assets and using such assets to invest in and establish a foreign-invested enterprise, or increasing the capital of a domestic enterprise.
一、本通知所称“特殊目的公司”，是指境内居民法人或境内居民自然人以其持有的境内企业资产或权益在境外进行股权融资(包括可转换债融资)为目的而直接设立或间接控制的境外企业。
For the purposes of this Circular, the term 'domestic resident legal person' means an enterprise or institution legal person or other economic organization established in China in accordance with the law. The term 'domestic resident natural person' means a natural person holding a lawful identification document, such as a resident ID card or passport of the People's Republic of China, or a natural person who, although not having legal status in China, is nonetheless normally resident in China due to economic interests.
本通知所称“返程投资”，是指境内居民通过特殊目的公司对境内开展的直接投资活动，包括但不限于以下方式：购买或置换境内企业中方股权、在境内设立外商投资企业及通过该企业购买或协议控制境内资产、协议购买境内资产及以该项资产投资设立外商投资企业、向境内企业增资。
For the purposes of this Circular, the term 'control' means the right to operate, the right to the benefits from or the right to decide the policies of a special purpose company or domestic enterprise obtained by a domestic resident through such means as a takeover, trust, holding on behalf of another, voting rights, buyback, convertible bonds, etc.
本通知所称“境内居民法人”，是指在中国境内依法设立的企业事业法人以及其他经济组织；“境内居民自然人”是指持有中华人民共和国居民身份证或护照等合法身份证件的自然人，或者虽无中国境内合法身份但因经济利益关系在中国境内习惯性居住的自然人。
2. Before a domestic resident establishes or takes control of an offshore special purpose company, it/he/she shall carry out the procedures for offshore investment related foreign exchange registration with the branch or office of the State Administration of Foreign Exchange (SAFE Branch) of the place where it/he/she is located on the strength of the following materials:
本通知所称“控制”，是指境内居民通过收购、信托、代持、投票权、回购、可转换债券等方式取得特殊目的公司或境内企业的经营权、收益权或者决策权。
(1) a written application (which shall detail the basic particulars of the domestic enterprise, the equity structure of the offshore special purpose company and the offshore financing arrangement);
二、境内居民设立或控制境外特殊目的公司之前，应持以下材料向所在地外汇分局、外汇管理部(以下简称“外汇局”)申请办理境外投资外汇登记手续：
(2) the domestic registration document, in the case of a domestic resident legal person, or proof of identity, in the case of a domestic resident natural person;
(一) 书面申请(应详细说明境内企业基本情况、境外特殊目的公司的股权结构以及境外融资安排)；
(3) the commercial plan for the offshore financing exercise;
(二) 境内居民法人的境内登记注册文件，境内居民自然人需提供身份证明；
(4) the official reply approving the source of the foreign exchange funds (assets) of a domestic resident legal person and the approval document from the department in charge of offshore investment;
(三) 境外融资商业计划书；
(5) the Offshore Investment Related Foreign Exchange Registration Certificate completed by the domestic resident legal person or the Form for Offshore Investment Related Foreign Exchange Registration of a Domestic Resident Individual (see the Attachment) completed by a domestic resident natural person; and
(四) 境内居民法人的外汇资金(资产)来源核准批复和境外投资主管部门的批准文件；
(6) other supporting materials on truthfulness.
(五) 境内居民法人填写的《境外投资外汇登记证》，境内居民自然人填写的《境内居民个人境外投资外汇登记表》(附表)；
After examining the aforementioned materials and determining that they are in good order, the SAFE Branch shall affix its designated seal for foreign exchange transactions for capital account items to the Offshore Investment Related Foreign Exchange Registration Certificate or the Form for Offshore Investment Related Foreign Exchange Registration of a Domestic Resident Individual.
(六) 其他真实性证明材料。
3. When a domestic resident injects into a special purpose company a domestic enterprise's assets or equity that it/he/she holds or when it/he/she conducts an offshore equity financing exercise after injecting the assets or equity into a special purpose company, it/he/she shall carry out the procedures for the amendment of offshore investment related foreign exchange registration in respect of its/his/her interest in the net assets of the special purpose company and any changes to such interest. When carrying out such procedures, the following materials shall be submitted:
外汇局对上述材料审核无误后，应在《境外投资外汇登记证》或《境内居民个人境外投资外汇登记表》上加盖资本项目外汇业务专用章。
(1) a written application (which details the process of the change in the shareholders and equity structure of the domestic enterprise and special purpose company and the method of pricing the assets or equity of the domestic enterprise and the special purpose company);
三、境内居民将其拥有的境内企业的资产或股权注入特殊目的公司，或在向特殊目的公司注入资产或股权后进行境外股权融资，应就其持有特殊目的公司的净资产权益及其变动状况办理境外投资外汇登记变更手续，办理时应提供以下材料：
(2) the Offshore Investment Related Foreign Exchange Registration Certificate completed by the domestic resident legal person or the Form for Offshore Investment Related Foreign Exchange Registration of a Domestic Resident Individual completed by a domestic resident natural person;
(一) 书面申请(详细说明境内企业与特殊目的公司的股东与股权变更过程、境内企业与特殊目的公司资产或股权的定价方式)；
(3) the approval document or record filing document from the department in charge of foreign investment for the round-trip investment;
(二) 境内居民法人填写的《境外投资外汇登记证》，境内居民自然人填写的《境内居民个人境外投资外汇登记表》；
(4) if state-owned assets are involved, the document from the state-owned asset administrative department confirming the value of the domestic enterprise's assets or equity;
(三) 外商投资主管部门对返程投资的核准、备案文件；
(5) the supporting documents of the special purpose company, such as its offshore registration, business licence, etc.; and
(四) 涉及国有资产的，须提供国有资产管理部门对境内企业资产或股权价值的确认文件；
(6) other supporting materials on truthfulness.
(五) 特殊目的公司的境外注册、登记、营业执照等证明文件；
4. Once a special purpose company has completed its offshore financing exercise, the domestic resident may remit back to China those proceeds destined for use in China in accordance with its/his/her commercial plan or the plan for the use of the proceeds included in the prospectus.
(六) 其他真实性证明材料。
5. When a special purpose company uses the proceeds from its offshore financing exercise for a round-trip investment or to provide a shareholder loan or other debt funds to a domestic enterprise, the relevant domestic enterprise shall carry out the relevant foreign exchange control procedures in accordance with current laws and regulations governing the administration of the use of foreign investment and foreign debt. When the SAFE Branch carries out the procedures for the domestic enterprise with respect to the registration of the establishment of a foreign-invested enterprise, the amendment of such registration, and foreign debt registration or carries out the procedures for a special purpose company for registration of foreign capital and foreign exchange in respect of foreign exchange received from the equity transfer, it shall examine the Offshore Investment Related Foreign Exchange Registration Certificate or the Form for Offshore Investment Related Foreign Exchange Registration of a Domestic Resident Individual.
四、特殊目的公司完成境外融资后，境内居民可以根据商业计划书或招股说明书载明的资金使用计划，将应在境内安排使用的资金调回境内。
6. After a domestic resident has carried out the procedures for offshore investment related foreign exchange registration or those for the amendment of such registration, remittance may be made to the Special Purpose Company of items such as profits, dividends, liquidation proceeds, equity transfer proceeds, capital reduction proceeds, etc.
五、特殊目的公司使用境外融资所得资金返程投资或向境内企业提供股东贷款及其他债务资金，相关境内企业应按照现行利用外资、外债管理法律、法规办理有关外汇管理手续。外汇局为相关境内企业办理外商投资企业设立登记及变更登记、外债登记、或者为特殊目的公司办理转股收汇外资外汇登记时，应审核《境外投资外汇登记证》或《境内居民个人境外投资外汇登记表》。
The profits, dividends and foreign exchange revenues derived from changes in capital that a domestic resident obtains from a special purpose company shall be remitted back to China within 180 days of the date of obtaining the same. Profits or dividends may be deposited into a foreign exchange account for current account items or settled, and, subject to the approval of the SAFE Branch, foreign exchange revenues derived from changes in capital may be retained after opening a dedicated account for capital account items or, subject to the approval of the SAFE Branch, may be settled.
六、境内居民按规定办理境外投资外汇登记及变更手续后，可向特殊目的公司支付利润、红利、清算、转股、减资等款项。
7. In the event that a material change in the capital of a special purpose company occurs, such as a capital increase or reduction, equity transfer or swap, merger or division, long-term equity or debt investment, provision of security to a third party, etc., without any round-trip investment being made, the domestic resident shall carry out the procedures for the amendment of offshore investment related foreign exchange registration or record filing procedures with the foreign exchange bureau within 30 days of the date of the occurrence of the material matter.
境内居民从特殊目的公司获得的利润、红利及资本变动外汇收入应于获得之日起180日内调回境内，利润或红利可以进入经常项目外汇账户或者结汇，资本变动外汇收入经外汇局核准，可以开立资本项目专用账户保留，也可经外汇局核准后结汇。
8. If a domestic resident established or took control of a special purpose company and completed a round-trip investment before the implementation of this Circular, but failed to carry out the procedures for offshore investment related foreign exchange registration, it/he/she shall do so with the SAFE Branch of the place where it/he/she is located in accordance with this Circular by March 31 2006. After the domestic resident carries out such procedures, the SAFE Branch may carry out the foreign investment and foreign debt related foreign exchange registration procedures for the relevant domestic enterprise.
七、特殊目的公司发生增资或减资、股权转让或置换、合并或分立、长期股权或债权投资、对外担保等重大资本变更事项且不涉及返程投资的，境内居民应于重大事项发生之日起30日内向外汇局申请办理境外投资外汇登记变更或备案手续。
9. Domestic venture investment enterprises may establish special purpose companies abroad with reference to this Circular to engage in venture investment activities.
八、本通知实施前，境内居民已在境外设立或控制特殊目的公司并已完成返程投资，但未按规定办理境外投资外汇登记的，应按照本通知规定于2006年3月31日前到所在地外汇局补办境外投资外汇登记。境内居民补办境外投资外汇登记后，外汇局可为相关境内企业办理外资、外债外汇登记手续。
10. If a control matter mentioned above involves more than one domestic resident, the relevant domestic residents shall issue a power of attorney appointing one or two among them to carry out the relevant foreign exchange control procedures.
九、境内创业投资企业可参照本通知在境外设立特殊目的公司并从事创业投资活动。
11. Any matters not covered in this Circular shall be handled in accordance with current foreign exchange control regulations relating to foreign investment and offshore investment.
十、上述同一管理事项涉及多个境内居民的，相关境内居民应出具委托书并委托其中1至2个境内居民办理相关外汇管理手续。
12. If a domestic resident violates this Circular and such violation constitutes an evasion of foreign exchange controls or other violation of foreign exchange control regulations, the SAFE Branch shall impose penalties in accordance with the PRC Foreign Exchange Control Regulations and relevant provisions.
十一、本通知未尽事宜，按照现行外商投资和境外投资相关外汇管理法规办理。
13. This Circular shall be effective as of November 1 2005. The implementation of the Circular on Issues Relevant to Improving the Foreign Exchange Administration Regarding Mergers and Acquisitions by Foreign Investors (ref. Hui Fa [2005] No.11) and the Circular on Issues Relevant to Registration Regarding Offshore Investments of Individual Domestic Residents and Foreign Exchange Registration in Respect of Mergers and Acquisitions by Foreign Investors (ref. Hui Fa [2005] No.29) shall be halted simultaneously.
十二、境内居民违反本规定构成逃汇及其他外汇管理违规行为的，外汇局应按照《中华人民共和国外汇管理条例》及有关规定进行处罚。
Appendix: Form for Offshore Investment Related Foreign Exchange Registration of a Domestic Resident Individual
clp reference:3800/05.10.21prc reference:汇发 [2005] 75号promulgated:2005-10-21effective:2005-11-01十三、本通知自2005年11月1日起实施。《关于完善外资并购外汇管理有关问题的通知》(汇发〔2005〕11号)和《关于境内居民个人境外投资登记和外资并购外汇登记有关问题的通知》(汇发〔2005〕29号)同时停止执行。
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now