SAFE Issues Notice to Deepen Reform of Foreign Exchange Management in Cross-Border Investment and Financing

On September 15, the State Administration of Foreign Exchange (SAFE) issued the Notice on Matters Related to Deepening Reform of Foreign Exchange Management in Cross-Border Investment and Financing (the “Notice”), effective from the date of publication.

The Notice clarifies the cancellation of registration for domestic direct investment pre-investment expenses and reinvestment by foreign-invested enterprises within China, allows foreign-invested enterprises to reinvest foreign exchange profits domestically, and facilitates the receipt of foreign capital by non-enterprise scientific research institutions. High-tech, “specialized and new,” and technology-based small and medium-sized enterprises may borrow foreign debts within a quota not exceeding USD 10 million, with the innovative scoring system increasing the enterprise quota to USD 20 million. The Notice simplifies cross-border financing business registration requirements, reduces the negative list for capital project income, optimizes the facilitation of foreign exchange income payments, and facilitates the settlement and payment of foreign exchange for overseas individuals purchasing homes in China.