By King & Wood's Foreign Investment
Group
On October 12, 2011, the Ministry of Commerce
(MOFCOM) promulgated the Circular on Issues
Relating to RMB Cross Border Direct Investment dated (the
"Circular"). The Circular provides that
outbound investors (including investors of Hong Kong, Macao and
Taiwan) can make direct investment with RMB funds they obtained
legally outbound (the "Offshore
RMB").
1. Scope of Offshore RMB
The Offshore RMB mainly includes (1) RMB legally acquired by
foreign investors through settlement of international trade; (2)
RMB remitted outbound which acquired through profit
distribution, equity transfer, reduction of registered capital,
liquidation or early return of investment in mainland China and (3)
RMB legally acquired or raised through issuing RMB bonds or stocks
outbound and other legal channels.
