Hogan Lovells China Alert - New SAFE Circular Changes the Rules on Company Financings and Round-Tripping Investments via Overseas Special Purpose Companies

The State Administration of Foreign Exchange ("SAFE") promulgated the State Administration of Foreign Exchange Circular on Issuing the Operational Rules concerning Foreign Exchange Administration of Company Financings and Round Tripping Investments via Overseas Special Purpose Companies by Residents in China [Huifa (2011) No. 19] ("Circular 19") on May 17, 2011. Circular 19 further clarifies issues concerning the implementation and application of the State Administration of Foreign Exchange Circular on Relevant Issues concerning the Foreign Exchange Administration of Residents in China Engaging in Financing and in Round-tripping Investment via Overseas Special Purpose Companies (No. 75 [2005] of the State Administration of Foreign Exchange, hereunder referred to as "Circular 75") and simplifies the operational procedures for Circular 75. Circular 19 will take effect on July 1, 2011.

For the comparison between Circular 106 and Circular 19 in respect of documentary requirements, please click HERE.


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