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With a view to improving the administration of sale and payment of foreign exchange for non-trade purposes, bettering the business environment for enterprises and promoting the development of the economy with foreign elements, the State Administration of Foreign Exchange has, after conducting extensive investigation and in-depth research, worked out the administrative policies on the sale and payment of foreign exchange by transnational companies and their associated companies within the Chinese territory to pay to overseas all types of non-trade expenses advanced by the head of associated companies outside China or apportioned to the first mentioned companies, which will be tried out in Beijing, Shanghai and Shenzhen. The State Administration of Foreign Exchange will sum up the experience in good time and specify the relevant policies nationwide. The relevant issues are hereby notified as follows: I. The transnational companies mentioned in the present Notice shall include: the foreign-funded transnational companies that have established foreign-funded investment companies within the Chinese territory upon approval of the foreign trade administrative department; and the Chinese-funded corporations that have obtained the right to engage in foreign business upon approval of the competent administrative department. II. The associated companies within the Chinese territory of the transnational companies mentioned in the present Notice shall include: the subsidiaries of the foreign transnational companies and the foreign-funded enterprises shared or controlled by the foreign transnational companies; the subsidiaries of or the foreign shared or controlled enterprises established within the Chinese territory by the head office or associated companies outside the Chinese territory and entrusted to the management of the transnational companies; and the subsidiaries, or the shared or controlled companies approved by the relevant department to have the right to engage in foreign business and established by the Chinese-funded corporations within the Chinese territory. III. The associated companies outside the Chinese territory of the transnational companies mentioned in the present Notice shall include: the subsidiaries established and the companies directly or indirectly shared or controlled in the countries and regions (including Hong Kong, Macao and Taiwan Regions, the same below) other than China by the head companies outside the Chinese territory of the foreign transnational companies; and the subsidiaries established and the companies shared or controlled in the countries and regions (including Hong Kong, Macao and Taiwan Region, the same below) other than China by the Chinese-funded corporations. IV. When paying to overseas the wages and subsidies, which have already been paid in advance by the head or associated companies outside the Chinese territory, of the employees with foreign nationalities or from Hong Kong, Macao or Taiwan, or the employees who retain the Chinese nationality and have obtained the right of permanent residence outside the Chinese territory (these employees are hereinafter referred to the foreign employees), or remitting directly to overseas the wages and subsidies of the foreign employees, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the overseas payment notice, the identity certification such as the passports of the foreign employees, the employment certification such as labor contracts, tax payment certification, etc. V. When paying to overseas expenses such as social, medical and pension insurance premiums of the foreign employees, which have already been paid in advance by the head or associated companies outside the Chinese territory, or remitting directly such expenses of the foreign employees to overseas, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the overseas payment notice, the identity certification such as the passports of the foreign employees, the employment certification such as labor contracts, tax payment certification, the overseas insurance policies, etc. VI. When paying to overseas the foreign travel expenses and overseas training fees of the employees, which have already been paid in advance by the head or associated companies outside the Chinese territory, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the overseas payment notice, the identity certification such as the passports of the employees, the employment certification such as the labor contracts, the certification bearing proof to the employees' overseas travel for business or training, etc. VII. When paying to overseas the apportioned patent royalties, license fees, technology transfer cost, etc, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the apportionment agreement, the overseas payment notice, the valid registration certification issued by the administrative department in charge of intellectual property or foreign trade, tax payment certification, etc. VIII. When paying to overseas the apportioned management cost, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the apportionment agreement, tax payment certification, etc. IX. When paying to overseas the other expenses advanced by the head or associated companies outside the Chinese territory or apportioned, the transnational companies and their associated companies within the Chinese territory may make the payment directly from their foreign exchange account or by purchasing foreign exchange with RMB at the designated foreign exchange banks, by presenting the overseas payment notice, the original documents for the relevant expenses, the tax payment certification if payment of tax is needed, etc. X. The transnational companies and their associated companies may download the relevant contracts, agreements, payment notices, etc. from the internet, and annex the company seal on them to go through the formalities for the sale and payment of foreign exchange for non-trade purposes. XI. The single foreign or Chinese-funded enterprises may conduct the sale and payment of foreign exchange for non-trade purposes by referring to the present Notice, if they observe the provisions on foreign exchange control, have no record of serious violation in this regard in the past three years, have good financial standing and a relatively large scale of foreign exchange income and expenditure on the current account, and exert considerable impact in the places where are located, upon the approval of the local foreign exchange administrations. XII. The Department of Foreign Exchange Administration in Beijing, and the branches of the State Administration of Foreign Exchange in Shanghai and Shenzhen should distribute the lists of the qualified transnational companies and their associated companies within the Chinese territory as well as the approved single foreign or Chinese-funded enterprises under their respective jurisdictions to the designated foreign exchange banks. XIII. The present Notice shall come into force as of the day of promulgation. After receiving the present Notice, the Department of Foreign Exchange Administration in Beijing, and the branches of the State Administration of Foreign Exchange in Shanghai and Shenzhen should transmit it to the designated foreign exchange banks and the relevant organizations under their respective jurisdictions; and after receiving the present Notice, the designated foreign exchange banks should transmit it to their respective branches in Beijing, Shanghai and Shenzhen. Should you have any problems in its implementation, please feed back to the Department of Current Account Administration, State Administration of Foreign Exchange. Contact Person: Ma Chao Telephone: 010-68402114 Fax: 010-68402272 |
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