Laws/Regulations

Control Over the Current Account

Foreign Exchange Receipts under the Current Account

An FIE can open a foreign exchange settlement account directly with a designated bank by presenting its Foreign Exchange Registration Certificate and other supporting documents. For foreign exchange received under the current account, the FIE may retain a certain amount of it within the limit prescribed by SAFE. Any excess portion has to be sold to designated banks.

Foreign Exchange Payments under the Current Account

When an FIE has to make external payments within its business scope, it may withdraw the required amount from its foreign exchange settlement account and any shortage can be made up for by purchasing foreign exchange with renminbi at designated banks. Details are as follows: (1) remittance of after-tax profits and bonuses to the foreign party of an FIE can be made from the foreign exchange account or at designated banks by presenting the board of directors' profit distribution resolution; (2) the after-tax wages and other legitimate incomes in renminbi of an FIE's foreign, overseas Chinese, Hong Kong, Macau and Taiwanese employees may be converted into foreign currency and remitted at designated banks upon presentation of relevant supporting documents; (3) after-tax dividends payable in foreign exchange may be remitted from the foreign exchange account or at designated banks.

Enterprises making advance payment for imports to their head office (or parent company) located outside the mainland, or to the subsidiaries or companies invested by or controlled by their offshore head office (or parent company) in a foreign country or region (including Hong Kong, Macau and Taiwan) are not required to submit a letter of guarantee for the advance payment. The FIE can directly complete the foreign exchange purchase and payment procedures at a designated bank by presenting the relevant proofs such as import contract, import foreign exchange payment verification and cancellation form, proforma invoice, FIE Foreign Exchange Registration Certificate and proof of the companies concerned.

Foreign Exchange Receipt Verification and Cancellation System on Exports

The requirement for submitting the verification and cancellation form to SAFE prior to receiving remittances has been cancelled. FIEs are now allowed to complete the procedures for verification and cancellation of foreign exchange receipts on exports in one go on a monthly basis, and can submit the documents online via the e-port system after export declaration instead of going to SAFE in person to submit the hard copies. Upon receipt of foreign exchange, the FIE can go to SAFE and complete the verification and cancellation procedures in one go by presenting the supporting documents including foreign exchange receipts on exports verification and cancellation forms, export declarations, invoices, and counterfoils of the foreign exchange receipts on exports verification and cancellation forms.

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China Consultants International Ltd.
香港中国顾问国际有限公司

 

NanHuan Rd., No 4028,

Joinhands Technology Park, Building No. 7,

Binjiang Hi-Tech Zone, Hangzhou, CHINA

 滨江区南环路4028号中恒世纪科技园7栋