Circular on the Revision of Certain Foreign Exchange Control Policies Relating to Overseas Investment
关于调整部分境外投资外汇管理政策的通知
The Circular symbolizes further liberalization of the capital account foreign exchange purchase and remittance by PRC entities for making outbound foreign investments, following previous attempts in 2003 and 2005.
(Issued by the State Administration of Foreign Exchange on June 6 2006 and effective as of July 1 2006.)
(国家外汇管理局于二零零六年六月六日发布，自二零零六年七月一日起施行。)
Hui Fa [2006] No.27
汇发[2006] 27号
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:
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：
With a view to meeting the requirements of the overseas economic development, improving the complementary policies for encouraging overseas investment and facilitating the multinational operations engaged in by domestic investors, the State Administration of Foreign Exchange has decided to revise certain foreign exchange policies relating to overseas investment. We hereby notify you on relevant matters as follows:
为适应对外经济发展的需要，完善鼓励境外投资的配套政策，便利境内投资者开展跨国经营，国家外汇管理局决定调整部分境外投资外汇管理政策。现就有关事项通知如下：
1. For the purposes of this Circular, the term 'overseas investment' means the act whereby various types of legal persons in China (Domestic Investors) establish enterprises overseas or obtain such rights and interests in existing enterprises overseas as ownership, or management rights, etc. through new establishment (in the form of wholly-owned enterprises, equity joint ventures, cooperative joint ventures, etc.), takeovers, mergers, taking of an equity interest, injection of capital, equity swap, etc.
一、 本通知所称境外投资是指我国境内各类法人(以下简称“境内投资者”)通过新设(独资、合资、合作等)、收购、兼并、参股、注资、股权置换等方式在境外设立企业或取得既有企业所有权或管理权等权益的行为。
2. overseas investment shall comply with state industrial policies on overseas investment and be beneficial to promoting the cross-border flow of factors of production and optimization of deployment. The overseas investment projects of Domestic Investors are subject to the approval of the relevant competent departments.
二、 境外投资应当符合国家境外投资产业政策，有利于促进生产要素跨境流动和优化配置。境内投资者到境外投资的项目须经有关主管部门核准。
3. With respect to the foreign exchange required by Domestic Investors when investing overseas, they may use their own foreign exchange, use foreign exchange purchased with renminbi or take out foreign exchange loans in China. Commencing from July 1 2006, the State Administration of Foreign Exchange will cease determining for its branches (offices) foreign exchange purchase limits for overseas investment. Once the overseas investment project of a Domestic Investor has been approved by the relevant competent departments, the procedures for the purchase and payment of foreign exchange funds shall be handled in accordance with existing provisions on foreign exchange control.
三、 境内投资者到境外投资所需外汇，可使用自有外汇、人民币购汇及国内外汇贷款。自2006年7月1日起，国家外汇管理局不再对各分局(外汇管理部)核定境外投资购汇额度。境内投资者的境外投资项目经有关主管部门核准后，按照现行外汇管理有关规定办理外汇资金购付汇核准手续。
4. Once a Domestic Investor has submitted an overseas investment project approval application or investment letter of intent to the relevant competent departments, it may, prior to receiving formal approval and subject to the approval of the branch, sub-branch or office of the State Administration of Foreign Exchange of the place where it is located (the Foreign Exchange Bureau), pay to the foreign party the preliminary costs relating to its overseas investment project with its own foreign exchange, foreign exchange purchased with renminbi or a foreign exchange loan taken out by it in China.
四、 境内投资者向有关主管部门提交境外投资项目核准申请或投资意向后，在获得正式批准前，经所在地国家外汇管理局分支局、外汇管理部(以下简称“外汇局”)核准，可以自有外汇、人民币购汇或国内外汇贷款向境外支付与境外投资项目相关的前期费用。
5. The preliminary costs for an overseas investment project remitted out of China by a Domestic Investor shall comply with the following specified purposes:
五、 境内投资者汇出用于境外投资项目的前期费用，应符合以下规定用途：
(1) be used to pay as the bond payable in accordance with the laws of the place where the project is located or as requested by the seller in order to acquire equity in an overseas enterprise or rights and interests in overseas assets;
(一) 收购境外企业股权或境外资产权益，按项目所在地法律规定或出让方要求需缴纳的保証金；
(2) be used to pay the bid bond payable in the bid invitation and submission process connected with the overseas investment;
(二) 在境外项目招投标过程中，需支付的投标保証金；
(3) be used to pay the expenses required for conducting market surveys, leasing office premises and equipment, employing personnel, and engaging foreign intermediary organizations to provide services before the overseas investment is made; and
(三) 进行境外投资前，需进行市场调查、租用办公场地和设备、聘用人员，以及聘请境外中介机构提供服务所需的费用；
(4) other preliminary costs relating to the overseas investment.
(四) 其他与境外投资有关的前期费用。
6. The Domestic Investor shall carry out the approval procedures for the outward remittance of the preliminary costs with the Foreign Exchange Bureau of the place where it is located on the strength of the following materials:
六、 境内投资者应持以下材料到所在地外汇局申请办理前期费用汇出的核准手续：
(1) a written application (which shall include the total amount of investment in the overseas investment project, the amount of the capital contributions of each party, the capital contribution methods, the amount of foreign exchange to be used and an explanation of the amount of the preliminary costs required, the purpose thereof and the source of the funds, etc.);
(一) 书面申请(包括境外投资项目总投资额、各方出资额、出资方式、用汇金额，以及所需前期费用金额、用途和资金来源说明等)；
(2) the Domestic Investor's business licence or proof of registration;
(二) 境内投资者的营业执照或注册登记証明；
(3) the documents relating to the Domestic Investor's participation in the bid invitation, merger, acquisition or equity or cooperative joint venture project (e.g. the letter of intent, memorandum or framework agreement, etc. executed by the Chinese and foreign parties);
(三) 境内投资者参与投标、并购或合资合作项目的相关文件(如中外方签署的意向书、备忘录或框架协议等)；
(4) the written undertaking issued by the Domestic Investor to the Foreign Exchange Bureau of the place where it is located (undertaking that the preliminary costs that it is to remit abroad will only be used for the approved overseas investment project and that, in the event of a breach, it will bear the relevant legal liability);
(四) 境内投资者向所在地外汇局出具的书面承诺函(承诺所汇出的前期费用只用于经批准的境外投资项目，如有违反，由境内投资者承担相关法律责任)；
(5) a statement stating the country (region) where the overseas account into which the preliminary costs will be remitted is located, the bank with which the overseas account has been opened, the account name and the account number; and
(五) 前期费用汇往境外账户的国别(地区)、境外账户开户行、开户人名称、账号的说明；
(6) other materials required by the Foreign Exchange Bureau.
(六) 外汇局要求的其他相关材料。
Once the Foreign Exchange Bureau has examined the materials and found them to be in order, it shall issue an approval document for foreign exchange on the capital account. The Domestic Investor shall carry out the procedures for the purchase and payment of foreign exchange with a designated foreign exchange bank in the place where it is located on the strength of the approval document.
所在地外汇局审核材料无误后，签发资本项目外汇业务核准件。境内投资者凭核准件到所在地外汇指定银行办理购付汇手续。
7. In general, the preliminary costs that a Domestic Investor applies to the Foreign Exchange Bureau of the place where it is located to remit abroad shall not exceed 15% of the total amount of the overseas investment for which it applied to the relevant competent departments in China. If the 15% limit genuinely needs to be exceeded due to business requirements, the approval shall be given by the branch or office of the State Administration of Foreign Exchange of the place where the Domestic Investor is located.
七、 境内投资者向所在地外汇局申请汇出的前期费用，一般不超过其向境内有关主管部门申请境外投资总额的15%；确因业务需要超过15%，由所在地外汇分局(外汇管理部)核准。
The preliminary costs whose remittance abroad is approved shall be included in the total amount of the Domestic Investor's overseas investment project. When approving the total investment funds to be remitted abroad for the project, the Foreign Exchange Bureau shall reduce it by the amount of the costs remitted abroad during the preliminary period.
境内投资者经核准汇出境外的前期费用，列入境内投资者到境外投资项目的总额。外汇局在核准其项目全部投资资金汇出时，应核减其前期已汇出的费用金额。
8. If a Domestic Investor needs to open an overseas account for its overseas investment project, it shall carry out the procedures therefor with the Foreign Exchange Bureau of the place where it is located in accordance with relevant provisions on the administration of overseas foreign exchange accounts.
八、 境内投资者如需为境外投资项目开立境外账户，应按照境外外汇账户管理有关规定向所在地外汇局申请办理。
9. If the Domestic Investor has not completed the approval procedures for the overseas investment project within six months of the date of remitting abroad the preliminary costs, it shall remit the funds remaining in its overseas account back into its foreign exchange account in China from where the funds were originally remitted abroad. If the foreign exchange funds remitted back into China were originally purchased with renminbi, it shall carry out foreign exchange settlement procedures with the designated foreign exchange bank on the strength of the original foreign exchange purchase approval document.
九、 境内投资者自汇出前期费用之日起6个月内仍未完成境外投资项目核准程序的，应将境外账户剩余资金调回境内原汇出的外汇账户。所汇回的外汇资金如属人民币购汇的，持原购汇核准文件，到外汇指定银行办理结汇。
10. Foreign Exchange Bureaux shall strengthen their examination of, compilation of statistics relating to, and monitoring of the purchase and payment of foreign exchange in connection with overseas investment funds and, on a monthly basis, write the net amount of preliminary costs occurring in their jurisdictions in
box 1.2.1.3 of the Monthly Statement on Flow and Exchange on the Capital Account and Subordinate Account, and submit the same to the State Administration of Foreign Exchange in accordance with provisions.
十、 外汇局应加强对境外投资资金购付汇的审核、统计和监测工作，逐月将辖区内前期费用淨发生额填入资本项目及附属项目流动及汇兑月报表1.2.1.3栏，并按规定向国家外汇管理局报告。
11. If a Domestic Investor violates this Circular, the Foreign Exchange Bureau will impose penalties in accordance with the PRC Foreign Exchange Control Regulations and relevant regulations.
十一、 境内投资者违反本通知规定，外汇局将依照《中华人民共和国外汇管理条例》等相关法规进行处罚。
12. This Circular shall be effective as of July 1 2006. In the event of a conflict between this Circular and previous provisions, this Circular shall prevail.
clp reference:3800/06.06.06prc reference:汇发[2006] 27号promulgated:2006-06-06effective:2006-07-01十二、 本通知自2006年7月1日起施行。以前规定与本通知相抵触的，按照本通知规定执行。
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