Central Bank Document No. 1 Approves Overseas Direct Investment In RMB Settlement

Reporter 13 days from

The method clearly states that all domestic enterprises permitted to conduct overseas direct investment can directly invest in Renminbi. The banks can directly handle RMB settlement business for enterprises according to the approval documents or documents of the competent authorities of overseas direct investment, and the relevant financial services formalities are more convenient. Banks can issue Renminbi loans to enterprises or projects that overseas enterprises that are permitted to invest in overseas direct investment in accordance with relevant regulations; and domestic enterprises permitted to invest abroad directly can remit their foreign direct investment profits in Renminbi to the territory.

According to the "measures", the people's Bank of China, the State Administration of foreign exchange and the competent department of foreign direct investment establish a mechanism of information sharing and supervision cooperation, strengthen supervision afterwards, and strengthen the responsibility of auditing the authenticity of banks.

The central bank said that actively and steadily carrying out the pilot project of RMB settlement of foreign direct investment will further expand the role of RMB in cross-border trade and investment, and better support enterprises' "going out" and further facilitate trade and investment facilitation.

Pilot scheme for RMB settlement of foreign direct investment

In line with the pilot scheme for RMB settlement in cross-border trade, and facilitating the RMB settlement business of foreign direct investment by banking financial institutions and domestic institutions, the people's Bank of China has formulated the "measures for the pilot management of RMB settlement of foreign direct investment", which is hereby promulgated and implemented.

People's Bank of China

January 6th, two

Measures for the pilot management of RMB settlement for offshore direct investment

Article 1 in line with the pilot scheme for RMB settlement in cross-border trade, it is convenient for domestic institutions to carry out overseas direct investment in Renminbi, and regulate the banking financial institutions (hereinafter referred to as banks) to handle RMB settlement business of overseas direct investment. These measures are formulated in accordance with the laws and administrative regulations of the people's Bank of China (People's Republic of China) and other laws and regulations.

The second article refers to the overseas direct investment referred to in these measures, which refers to the approval and approval by the competent authorities of overseas direct investment, and the use of Renminbi funds to establish or acquire the rights or interests of ownership or control or management right of enterprises or projects overseas.

The domestic institutions mentioned in these Measures refer to non-financial enterprises registered in the pilot area for RMB settlement in cross-border trade.

The term "prophase expenses" as mentioned in these Measures refers to the expenses related to overseas direct investment paid by overseas institutions before the establishment of projects or enterprises abroad.

Third the people's Bank of China and the State Administration of foreign exchange control and implement the pilot projects for RMB settlement of foreign direct investment in accordance with these measures.

Fourth domestic institutions for overseas direct investment in Renminbi should be approved by the competent department of foreign direct investment.

When handling overseas direct investment approval, domestic institutions should specify the amount of investment to be invested in Renminbi.

Fifth overseas direct investment, which has been remitted or paid out of the previous cost of the overseas direct investment, shall be submitted to the foreign exchange bureau at the locality where the following materials are to be handled, and the registration for the initial cost remittance or overseas direct investment shall be processed.

(1) written application;

(two) the approval document of the competent department of foreign direct investment and its photocopy, or the photocopy of the application documents for overseas direct investment submitted to the competent department of foreign direct investment;

(three) photocopy of business license and organization code certificate of domestic organizations.

The foreign exchange bureau at the locality of the domestic institution shall complete the registration of relevant information within 3 days from the date of receiving the relevant application materials.

Overseas direct investment that has occurred before the cost is remitted, and the domestic institution shall submit the relevant information to the local foreign exchange bureau within 30 days after obtaining the approval of the competent department of foreign direct investment.

In accordance with the first paragraph of article fifth of the present measures, the sixth domestic institutions may go to the bank to handle the repatriation of RMB foreign direct investment or the export of RMB yuan for the initial cost.

In handling RMB settlement business of overseas direct investment, banks should, in accordance with the relevant regulations on prudential supervision, require domestic institutions to submit relevant materials such as approval certificates or documents of overseas direct investment authorities, and examine them seriously.

During the audit process, banks can log in the RMB cross-border payment information management system and direct investment foreign exchange management information system to inquire relevant information.

Seventh, after examining the application documents submitted by the competent authorities of the overseas direct investment institutions and the relevant organization's code certificate of the domestic organizations, the banks can handle the repatriation of the RMB's initial cost of overseas direct investment for domestic institutions.

The initial cost of the accumulated remittance of domestic institutions must not exceed 15% of the total Chinese investment declared by the competent department of foreign direct investment.

If the business needs for overseas mergers and acquisitions, and the initial cost is more than 15%, the relevant foreign exchange documents should be explained and submitted to the local foreign exchange bureau.

The eighth banks shall, in accordance with the regulations on the management of RMB bank settlement accounts (promulgated by the people's Bank of China Order No. 2003] fifth, etc., through the RMB bank settlement account of the domestic institutions, handle the settlement of RMB funds for overseas direct investment, and submit the information on cross-border payment of RMB funds to the cross border payment information management system of the people's Republic of China.

Ninth RMB related businesses of foreign direct investment need to use foreign exchange funds at the same time. Domestic institutions and banks should handle the procedures for remittance and clearance of foreign direct investment funds in accordance with the relevant provisions of foreign exchange management.

When dealing with the procedures for remittance and entry of foreign exchange funds, banks shall enter into the direct investment foreign exchange management information system to conduct business audit so as to ensure the compliance of related businesses.

The sum of RMB and foreign exchange funds remitted by tenth banks for overseas direct investment handled by domestic institutions must not exceed the total amount of foreign direct investment approved by the competent authorities of overseas direct investment.

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The initial cost of Renminbi which has been remitted abroad by domestic institutions should be included in the total amount of overseas direct investment.

The bank should deduct the amount of the initial cost of the Renminbi that has been remitted when it pacts renminbi funds for the domestic institution.

Banks should submit information on cross border payment of RMB pre payment fees to the RMB cross-border payment and payment information management system.

Eleventh, within 6 months from the date of the repatriation of the Yuan's initial costs, the competent authorities of foreign direct investment have not been approved by the foreign direct investment authorities. The domestic institutions should return the remaining funds to the domestic Renminbi accounts of the original remittance funds.

Banks should urge domestic institutions to pfer the remaining funds back to the domestic Renminbi accounts of the original remittance funds.

If a bank refuses to be refunded, the bank shall file a record with the local people's Bank.

The twelfth domestic institutions may remit their profits from overseas direct investment to the territory in Renminbi.

After examining the materials submitted by domestic institutions for the disposal of profits from overseas investment enterprises, the banks can handle the entry procedures for Renminbi profits of overseas direct investment for the domestic institutions, and shall send back RMB profits to the RMB cross-border payment information management system.

The thirteenth domestic institutions can directly handle the RMB capital remittance procedures with the approval documents of the competent department of foreign direct investment, because of the renminbi income and expenditure of overseas invested enterprises such as capital increase, capital reduction, stock pfer and liquidation.

When handling the above business, the bank shall submit the RMB cross-border receipt and payment information to the RMB cross-border payment and payment information management system.

Fourteenth registered foreign enterprises, such as name, duration of operation, joint venture partners, joint venture and cooperation, and other basic information changes, or capital raising, capital reduction, equity pfer or replacement, merger or separate liquidation, etc., domestic institutions shall submit the above changes to the local foreign exchange bureau within 30 days from the date of occurrence.

The fifteenth banks may issue Renminbi loans to enterprises or projects invested abroad by domestic institutions in accordance with relevant regulations.

Through the issuance of RMB loans by overseas branches or overseas agency banks of the bank, the bank may allocate RMB funds to its overseas branches or finance renminbi funds to the overseas agent banks, and record them to the local people's Bank within 15 days.

When handling the above business, the bank shall submit the RMB cross-border receipt and payment information to the RMB cross-border payment and payment information management system.

Article sixteenth when handling the RMB settlement business of foreign direct investment, the banks and domestic institutions shall handle the declaration of balance of payments according to the relevant provisions of the international balance of payments statistics declaration method.

The seventeenth banks should conscientiously fulfill the obligation to submit information, and timely, accurately and integrally submit all kinds of RMB cross-border payment information related to overseas direct investment to the RMB cross-border payment and payment information management system.

In dealing with the RMB settlement business of foreign direct investment, the eighteenth banks should perform their anti money laundering and anti terrorist financing obligations in accordance with the relevant provisions of the anti money laundering law of the People's Republic of China and the people's Bank of China, and prevent the use of RMB foreign direct investment for money laundering, terrorist financing and other illegal activities.

Banks should collect anti money laundering and anti-terrorism financing information of destinations for overseas direct investment of domestic institutions, assess the money laundering and terrorist financing risks of destinations for overseas direct investment, and take appropriate risk management measures.

The nineteenth PBC is to establish information sharing mechanism with the State Administration of foreign exchange and the competent department of foreign direct investment, and supervise the inspection after major events.

The RMB cross border payment and information management system pfers foreign direct investment related RMB cross-border payment information to the direct investment foreign exchange management information system daily, and directly pmits the foreign exchange management information system to the RMB cross-border payment information management system to pmit foreign direct investment related cross-border receipts and payments information daily.

Article twentieth the people's Bank of China and the State Administration of Foreign Exchange jointly conduct on-site inspections and off-site inspections of Renminbi and foreign direct investment activities of banks and domestic institutions, and urge banks to effectively fulfill the duties of paction authenticity auditing, information submission and anti money laundering, and supervise domestic institutions to carry out business activities according to law.

If the twenty-first banks or domestic institutions violate the relevant provisions of these measures, the people's Bank of China and the State Administration of foreign exchange may make a notice of criticism or punishment according to law; if the circumstances are serious, banks or domestic institutions may be prohibited from carrying out cross-border RMB business.

If the twenty-second banks violate the relevant prudential regulations when handling the RMB settlement business of foreign direct investment, they shall be punished by the relevant departments according to law. In violation of the provisions on the administration of anti money laundering, anti terrorist financing and RMB bank settlement accounts, the people's Bank of China shall punish the people's Bank of China in accordance with the law.

Twenty-third, the management of RMB settlement business of overseas direct investment by domestic financial institutions shall be implemented in accordance with these measures.

Where the relevant regulatory authorities have otherwise provided for the direct investment in Renminbi by domestic financial institutions, such provisions shall apply.

The twenty-fourth way is to be explained by the people's Bank of China.

The twenty-fifth measures shall come into force on the date of promulgation.

The relevant provisions previously promulgated are inconsistent with the present measures, and shall be implemented in accordance with these measures.