China removes limits on FDI payments and account validity terms to lure foreign investors.

Oct 23, 2018 (China Knowledge) - China's State Administration of Foreign Exchange (SAFE) has removed limits on foreign direct investment (FDI) upfront payments and account validity terms hoping to lure more foreign investors through the added convenience and improve the country's business environment.

FDI upfront payments are no longer capped at USD 300,000 and investors, now onwards, can freely transfer and use these funds. Accounts used to disburse these funds are also no longer limited to 6 months and their tenure can be flexible based on the investor's need.

Most foreign investors conduct research, inspections and studies before their actual investment which incurs preparatory cost which will require them to transfer capital over for settlement. The new regulations will allow investors to arrange fees for such activities more freely and conveniently based on their actual needs.

SAFE will focus on verifying the authenticity and compliance of the movement of these upfront payments to remove obstacles for genuine investors while still preventing arbitrage funds from leaving and entering the country.

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