New foreign exchange regulation to facilitate outbound investments and financing through special purpose vehicles
Early on 21 October 2005, the State Administration of Foreign Exchange (SAFE) released Circular Huifa  No.75 (Circular 75) clarifying relevant foreign exchange (forex) registration matters for outbound financing and round-trip investments through special purpose vehicles (SPVs) by Chinese residents, which in particular provided guidelines for companies intending to list overseas.
With more and more Chinese companies ‘going abroad’, China has been making efforts to remove policy barriers to facilitate outbound investments and financing. In July 2014, the SAFE released the Notice Simplifying Certain Matters Related to the Forex Administration on Outbound Investments, Outbound Financing and Round-trip Investments by Chinese Residents Through SPVs (Huifa  No.37, or Circular 37). Circular 37 adjusts the definition of some key terms (including that of ‘SPVs’), optimises the forex administration on SPVs, and clarifies forex registration requirements on equity-based incentive schemes granted by non-listed overseas SPVs to Chinese employees. Circular 37 took effect from its issuance date and Circular 75 was abolished at the same time.
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