Regulator makes outbound investment easier
July 29, 2009 | BY
clpstaff &clp articlesNew regulations on the funding of overseas subsidiaries will help Chinese companies invest abroad, and a separately-issued rule makes it clear that the…
New regulations on the funding of overseas subsidiaries will help Chinese companies invest abroad, and a separately-issued rule makes it clear that the government wants investments to be made strategically.
After August 1 2009, when the Circular on Issues Relevant to Foreign Exchange Control on Granting of Overseas Loans by Enterprises in China (关于境内企业境外放款外汇管理有关问题的通知) issued by the State Administration of Foreign Exchange (Safe) –click here for further analysis – takes effect, Chinese companies will be able to lend up to 30% of their equity to their overseas subsidiaries for use as debt capital.
“The Circular was published at a very critical moment,” said Zhou Jiaxing, a Hong Kong-based Chinese lawyer.
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