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Going global: China further relaxes foreign exchange controls over direct investment

Overview

In late November, China's State Administration of Foreign Exchange promulgated a new circular which aims to dramatically simplify foreign exchange administration procedures concerning inbound and outbound direct investment. The circular is both a response to a fall 2012 directive to reduce administrative approvals and also reflects a trend of relaxing foreign exchange supervision given China's accumulation of major foreign exchange reserves.


The circular, which became effective on 17 December 17 2012, is expected to have a significant impact on foreign direct investment and outbound investment by domestic enterprises and help domestic enterprises pursue a "Go Global" strategy.


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