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As one of the efforts to further improve the country’s business environment and open up its economy, State Administration of Foreign Exchange (SAFE) announced its latest measures to facilitate cross-border trade and investment and streamline SAFE administrations by issuing a Circular on Further Promotions to Facilitate Cross-border Trade and Investment (Huifa  No 28), effective on October 25, 2019, and a Circular on Streamlining Foreign Exchange Accounts (Huifa  No. 29) which is to be effective on February 1, 2020.
1、Foreign investment enterprises without investment business are allowed to use their foreign exchange registered capital to make equity investment
Previously only those foreign investment enterprises who have a business scope of “investment”, including foreign investment holding companies, foreign investment venture capital enterprises and foreign investment equity investment enterprises, are allowed to use their foreign currency registered capital to make equity investment in China based on actual investment need following the principles of authenticity and regulatory compliance.
Now any foreign investment enterprise, regardless it has an investment business scope, may utilize its foreign exchange registered capital to make a domestic equity investment, as long as
● such investment is in line with the market access requirement under the Negative List; and
● equity investment project is authentic and compliant.
2、Payment from foreign exchange receipts under capital account no longer requires prior verification of supporting documents
Previously, if a domestic institution intends to make payment using the foreign exchange receipts under capital account (including foreign exchange registered capital, foreign exchange debts and foreign exchange funds raised through overseas listing), it shall provide to relevant banks documents to prove the authenticity of purpose for each payment in advance.
Now, any qualified enterprise including foreign investment enterprises in pilot regions may make a payment from foreign exchange receipts under capital account in China without obligation to provide the abovementioned supporting documents for bank verification, as long as
● use of fund is authentic and compliant; and
● use of fund is in line with the permitted use.
3、Restriction that foreign investor’s deposit cannot be exchanged to RMB is removed
Any deposit remitted by a foreign investor from overseas or allocated within China now can be used for the foreign investor’s capital contribution to its invested enterprises or payment for considerations inside or outside China. Any fund in such deposit account is allowed to be exchanged to RMB for any payment.
4、Foreign exchange debt registration is further simplified
(1) All non-finance enterprises including foreign investment enterprises may apply for registration of foreign exchange debts with a quota of twice of their respective net assets. Within the registered amount of foreign exchange debts, they may borrow the foreign exchange debts at their discretionary schedule, without a need to register each borrowing, compared to the previous requirement.
(2) Non-bank borrowers may deregister foreign exchange debts registrations directly through banks without time limits any longer.
5、Restriction on quantity of foreign exchange accounts under capital account is removed.
The new SAFE measures have removed restriction on quantity of foreign exchange accounts under capital account. Now enterprises may apply to open multiple foreign exchange accounts pursuant to their actual needs and requirements of prudent supervision.
6、Foreign exchange accounts will be streamlined from February 1, 2020
Pursuant to the Circular on Streamlining Foreign Exchange Accounts (Huifa  No. 29), starting from February 1, 2020, SAFE will streamline some foreign exchange accounts in order to reduce the types of accounts. It will involve around 20 types of foreign exchange accounts. To support the streamlining, SAFE issued an operation guide at the same time, detailing the practices of opening, entry and use of relevant foreign exchange accounts under capital account.
 Domestic institutions shall comply with the following provisions in using their foreign exchange receipts under the capital account and RMB funds obtained from foreign exchange settlement:
(1) Such receipts and funds shall not, directly or indirectly, be used for the expenditures beyond the business scope of domestic institutions or the expenditures prohibited by laws and regulations of the State;
(2) Unless otherwise provided, such receipts and funds shall not, directly or indirectly, be used for investment in securities or other investments than banks’ principal-secured products;
(3) Such receipts and funds shall not be used for the granting of loans to non-affiliated enterprises, with the exception that such granting is expressly permitted in the business license; and
(4) Such receipts and funds shall not be used for construction or purchase of real estate for purpose other than self-use (exception applies for real estate enterprises).