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Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Administration on Encouraging and Guiding the Healthy Development of Private Investment

Date of Issuance: 06-15-2012     Reference Number: Hui Fa No. 33 [2012]


The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; and the branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

 

To further implement the Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment (No. 13 [2010] of the State Council), and to encourage and guide the healthy development of private capital investment abroad, the relevant foreign exchange administration issues concerning the perfection of the promoting and protecting system of investment abroad are hereby notified as follows:

 

I. Simplify the Oversea Direct Investment Funds Repatriation Management

The exported oversea direct investment funds that are the difference between the domestic enterprise’s total investment and the registered capital, may be remitted back to domestic territory without capital reduction or divestment registration after the registration with the local foreign exchange bureaus.

 

II. Simplify the Foreign Exchange Administration of Overseas Loan

The fund resources of overseas loan are relaxed, and domestic enterprises are granted the overseas loan with domestic foreign exchange debt. The approval procedures of overseas loan purchase and payment of funds and repatriation for credit will be cancelled; when the credit limit of overseas loan business is approved and relevant registration procedures with the competent local SAFE branch and foreign exchange management department where it is located is completed, the domestic enterprises may directly transact the overseas funds special account receipts and payments in the designated foreign exchange bank.

 

III. Appropriately Relax the Management of Individual External Guarantee

To support enterprises 'going out', while the domestic enterprises provide external guarantee for the foreign-invested enterprises’ overseas financing, domestic individuals are allowed as co-guarantors, by means of guarantee, mortgage, pledge and other ways permitted by guarantee rules, to provide guarantees for the same debt.

 

Domestic individuals shall entrust the domestic enterprises, which provide guarantee at the same time, to apply for guarantee application with the competent foreign exchange bureau where domestic enterprises locate. The external guarantee guarantee registration for domestic individuals may simultaneously be made upon the approval by the foreign exchange bureau for the domestic enterprises to provide external guarantee for such debts according to prescribed procedures. The foreign exchange bureau will not substantively review the qualifications, external guarantee means and the guaranteed property scope of domestic individuals.

 

While the foreign exchange bureau is handling external guarantees registration for the domestic enterprises, it may note the situation in the domestic enterprises’ external guarantee registration certificate that domestic individuals provide external guarantees for the same debt. While domestic individuals perform the obligations of external guarantee, the local foreign exchange bureaus shall handle the relevant formalities upon the evidentiary documents of performance of their obligations.

 

This Circular shall come into effect as of July 1, 2012. In case of any inconsistence among the relevant regulations in Notice of the State Administration of Foreign Exchange on the Relevant Issues concerning the Foreign Exchange Administration of Overseas Loans Granted by Domestic Enterprises (No. 24 [2009] of the State Administration of Foreign Exchange), Notice of the State Administration of Foreign Exchange on Issuing the Provisions on the Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions (No.30 [2009] of the State Administration of Foreign Exchange) and this Circular, this Circular shall prevail.

 

June 11, 2012

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