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To improve the foreign exchange administration of foreign-funded enterprises (hereinafter referred to FFEs), and make operation convenient, according to Article 31 of Regulations on the Administration of Sales, Purchase of and Payment in Foreign Exchange, we hereby make following notice on some issues concerning capital changes such as increase, transfers, etc., of FFEs, re-investment within Chinese territory by foreign-funded holding companies with their paid-in capital, or by the foreign party of existing FFEs with its profit obtained domestically: I. For making re-investment domestically in a new FFE with its distributed foreign exchange or Renminbi profit, the foreign party of existing FFEs shall apply with the domiciled branch of the State Administration of Foreign Exchange (hereinafter referred to SAFE) by presenting the following documents: (1) Capital assessment report issued by certified public accountants (CPA); (2) Annual auditing financial report; (3) Tax clearance certificate; (4) The board of directors' profit distribution resolution; (5) Re-investment with profits by foreign sides confirmation; (6) Foreign Exchange Registration Certificate of the existing FFE; and (7) Other documents required by SAFE. After verifying the above-mentioned documents authentic, the domiciled branch of SAFE shall issue a proof verifying the source of profit. The proof shall serve as a certificate for the new FFE to apply for Business License of Industry and Commerce and capital assessment report. The designated foreign exchange bank shall make payment for the re-investor from the foreign exchange settlement accounts or capital accounts of the existing FFE on the strength of the proof issued by SAFE. II. In case of re-investment in the existing FFE with its distributed profit, relevant approval documents for the re-investment project issued by the competent department shall also be provided in addition to documents prescribed in the previous article. III. For making re-investment domestically with its paid-in capital, foreign-funded holding company shall apply with SAFE by presenting the following documents for capital remittance: (1) Capital assessment report issued by CPA; (2) Approval documents issued by the competent department, Business License of Industry and Commerce, approved contract and constitution of the new enterprise; (3) The re-investment resolution of the foreign-funded holding company's board of directors; (4) Foreign Exchange Registration Certificate of the foreign-funded holding company; and (5) Other documents required by SAFE. IV. In case of capital increase, transfer, and other changes, FFEs shall apply with SAFE by presenting the following documents: (1) Capital assessment report issued by CPA; (2) The resolution of the board of directors; (3) Approval documents issued by the original competent department; (4) Foreign Exchange Registration Certificate of the FFE; and (5) Other documents required by SAFE. In case of capital transfer, transfer agreement shall also be provided. After verifying above-mentioned documents authentic, SAFE shall issue Approval Certificate for Domestic Remittance of Foreign Exchange Capital to the foreign-funded holding company. The designated foreign exchange bank shall remit the foreign exchange capital on the strength of the Approval Certificate. V. This Circular shall go into effect as of July 1, 1996. Attachment: Foreign-funded Enterprise Onshore Investment In Foreign Exchange Allocation Approval Form (omitted) |
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