Cross-border RMB cash pooling made possible for multinational corporations in China
In early 2014, China launched a pilot program to enable cross-border RMB cash pooling in the Shanghai Pilot Free Trade Zone (SH PFTZ). Many domestic and foreign-invested multinational corporations (MNCs) joined the pilot program and provided positive feedbacks. The cross-border RMB cash pooling mechanism allows MNCs more channels to recoup RMB back to mainland China, while at the same time better centralise and manage their treasury and cash management globally, thereby achieving savings in financing costs at the group's level. In June 2014, in response to the call of the State Council, the People’s Bank of China (PBOC) proposed to expand cross-border RMB cash pooling operations nationwide to enhance the centralised RMB cash management of MNCs. In November, the PBOC issued the Notice regarding centralised cross-border RMB operation by MNCs (Circular Yinfa  No. 324, hereinafter referred to as 'Circular 324') to set forth detailed guidance on cross-border RMB cash pooling by MNCs nationwide.
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