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Corporate Service - China

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Q&A Regarding Foreign Exchange Management of Direct Investment (2)

Answer
Q:
Is there any limit on the cumulative amount of overseas direct investment funds remitted?
A:
The cumulative amount of overseas direct investment funds remitted by designated foreign exchange banks for domestic institutions shall not exceed the total amount of overseas direct investment foreign exchange funds previously registered by the domestic institution in the relevant business system by the foreign exchange bureau.

Q:
What should be done if the overseas direct investment country is a foreign exchange control country?
A:
Domestic institutions investing in countries or regions subject to foreign exchange control may open dedicated foreign exchange accounts in other countries or regions not subject to foreign exchange control in accordance with regulations for the receipt and payment of foreign exchange funds related to the investment.

Q:
What needs to be done before making overseas direct investment?
A:
Relevant market entities may choose their own banks to handle foreign exchange registration for direct investment. After completing the foreign exchange registration for direct investment, they can proceed with subsequent direct investment related account opening, fund exchange, and other businesses (including profit and dividend remittance or repatriation).

Q:
Under what circumstances is it necessary to change the foreign exchange registration of overseas direct investment?
A: If the registered overseas enterprise changes its basic information such as name, business term, joint venture partner and joint venture cooperation mode, or capital increase, capital reduction, equity transfer or replacement, merger or division, etc., the domestic institution shall go through the formalities for changing the foreign exchange registration of overseas direct investment within 60 days from the date of the above changes.

Q:
Under what circumstances is it necessary to deregister the foreign exchange registration of overseas direct investment?
A: If the equity of overseas enterprises held by domestic institutions is deregistered due to reasons such as equity conversion, bankruptcy, dissolution, liquidation, or expiration of operation, the domestic institution shall go through the formalities for the deregistration of the foreign exchange registration of overseas direct investment within 60 days from the date of obtaining relevant certification materials.

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