News Column

China : CHINA crosses border investments to internationalize the YUAN

July 15, 2014

China announced modest easing of foreign exchange controls, allowing offshore investment and financing through special purpose entities (SPEs).

SPEs are legal entities created overseas to isolate a firm from financial risk or to hide ownership or debts.

Citizens can invest in onshore assets or equities in offshore SPEs after they register at with State Administration of Foreign Exchange (SAFE) and can trade in foreign currencies to raise capital for offshore SPEs.

SAFE has removed the restriction on domestic enterprises transferring assets or equities to offshore SPEs.

It is not necessary for SPEs to remit profits, bonuses or income from capital changes within 180 workdays.

The new rules are the latest step in the internationalization of the yuan.

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Source: TendersInfo (India)

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