State Administration of Foreign Exchange, 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

国家外汇管理局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

October 31, 2005 | BY

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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.

Clp Reference: 3800/05.10.21 Promulgated: 2005-10-21 Effective: 2005-11-01

Issued: October 21 2005
Effective: November 1 2005

Main contents: The Circular addresses the 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.
Related legislation: PRC Foreign Exchange Control Regulations (2nd Revision), Aug 5 2008, CLP 2008 No.8 p.77; Measures for Exchange Control for Investments Outside China, Mar 6 1989 and Tentative Provisions for Acquisition of Domestic Enterprises by Foreign Investors, Mar 7 2003, CLP 2003 No.3 p.27
Repealed legislation: Circular on Issues Relevant to Improving the Foreign Exchange Administration Regarding Mergers and Acquisitions by Foreign Investors, Jan 24 2005, CLP 2005 No.3 p.36 and 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, Apr 21, 2005, CLP 2005 No.7 p.34

clp reference:3800/05.10.21prc reference:汇发 [2005] 75号promulgated:2005-10-21effective:2005-11-01

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