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ARTICLE · 21 AUGUST 2014

Update On PRC Cross-Border Lending Transactions

Jones Day
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Previously, overseas lenders found it difficult to get a PRC entity to guarantee or provide onshore security for loans made to that PRC entity's offshore affiliate.

ChinaFinance and Banking
Jessie Tang
Jessie Tang
Michelle Taylor
Michelle Taylor
Wilson Sung
Wilson Sung
Patrick Hu
Patrick Hu
Michelle Chen
Michelle Chen
Graham Lim
Graham Lim
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The State Administration of Foreign Exchange ("SAFE") of the People's Republic of China ("PRC") is the body that supervises the country's foreign exchange transactions. SAFE recently issued two circulars to encourage cross-border transactions: Circular No. 29 [2014] Provisions on Foreign Exchange Administration of Cross-Border Guarantee and Security (跨境担保外汇管理条例) ("Circular 29") and Circular No. 37 [2014] Issues Relating to the Administration of Foreign Exchange in Respect of Offshore Investments, Financings and Return Investments by Domestic Residents through Special Purpose Vehicles (国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知) ("Circular 37"). Circular 29 took effect on June 1, 2014, and Circular 37 was issued on July 14, 2014. Both support China's strategy for domestic companies to "go global" by relaxing restrictions on foreign exchange transactions.

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