In This Issue
SAFE Issues Notice of State
Administration of Foreign Exchange on Further Improving and
Adjusting Foreign Exchange Policies Related to Direct
Investment
SAFE Makes
Revisions to Provisions on Foreign Exchange Administration
Concerning Investment in Securities in China by Qualified Foreign
Institutional Investors
The Measures for Enjoyment of Relevant
Treatment by Foreigners Permanently Residing in China
Released
Five
Ministries and Commissions Jointly Release a Notice to Provide Visa
and Residence Facilities for Foreign High-level
Talent
GAPP Seeks
Public Opinions on Administrative Measures for Online Publication
Services (Revised Draft for Comments)
GAPP Seeks Public Opinions on Administrative
Measures for Overseas Press and Publication Institutions
Establishing Offices in China (Draft for
Comments)
SAFE Issues Notice of
State Administration of Foreign Exchange on Further Improving and
Adjusting Foreign Exchange Policies Related to Direct
Investment
On November 19, 2012, the State
Administration of Foreign Exchange ("SAFE") issued the Notice of the
State Administration of Foreign Exchange on Further Improving and
Adjusting Foreign Exchange Policies Related to Direct Investment
(the "Notice"), which became effective on December 17, 2012. The
purpose of the Notice is to simplify the administrative procedures
and approvals, strengthen the statistics and supervision work, and
make foreign exchange policies related to direct investment
registration-based.
The Notice mainly covers the following
points: (1) abolishing the requirement to obtain SAFE's approval for
the opening of and payment into foreign exchange accounts for direct
investment; (2) abolishing the requirement to obtain SAFE's approval
for reinvestment of foreign investors' legal income obtained in
China, for example, conversion by foreign-invested enterprises of
capital reserves, surplus reserves, undistributed profits or other
legal income that belongs to foreign investors or their registered
external loans (including interest) into registered capital; (3)
simplifying the administration of foreign exchange for reinvestment
in China by foreign invested holding companies; (4) simplifying the
procedures for capital verification and confirmation that foreign
invested enterprises are required to complete; (5) simplifying the
foreign exchange registration procedures for acquisition, by foreign
investors, of shares held by Chinese parties; (6) abolishing the
requirement to obtain SAFE's approval for purchase and external
payment of foreign exchange for direct investment; (7) abolishing
the requirement to obtain SAFE's approval for domestic transfer of
foreign exchange for direct investment; (8) further relaxing
controls regarding the provision of loans abroad; (9) improving the
administration of the conversion (into RMB) of foreign exchange
capital of foreign invested enterprises; and (10) requiring banks to
enhance their awareness of compliance in the process of conducting
foreign exchange businesses for direct investment. The plan for the
transition and transfer of historic business and direct investment
system data is also attached to this Notice.
The full Chinese
text of the Notice is available here.
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SAFE Makes Revisions to
Provisions on Foreign Exchange Administration Concerning Investment
in Securities in China by Qualified Foreign Institutional
Investors
On December 14, 2012, the State
Administration of Foreign Exchange ("SAFE") issued the amendments to
the Provisions on Foreign Exchange Administration Concerning
Investment in Securities in China by Qualified Foreign Institutional
Investors (Announcement [2012] No. 2 of SAFE) (the "Announcement"),
which came into force on the same date.
For investment
quotas, the Announcement permits the upper limit of the investment
quota of sovereign funds, central banks or monetary authorities to
be over the equivalent of USD 1 billion. For account administration,
the Announcement further requires that custodians shall report to
SAFE's local counterparts at their place of domicile for record
purposes within five working days after the opening of foreign
exchange accounts and dedicated RMB deposit accounts of qualified
foreign institutional investors ("QFIIs") and that they shall submit
the official custodianship agreement to SAFE to collect the Foreign
Exchange Registration Certificates of the QFIIs.
The
Announcement adds one article which provides that a QFII may, upon
expiry of the lock-in period for the investment principal, remit the
investment principal and the investment proceeds abroad in
installments or by batches; the monthly amount of funds (including
investment principal and proceeds) remitted abroad by a QFII shall
not exceed 20% of its total domestic assets as at the end of the
preceding year. The Announcement also amends a provision on
remittance of an open-end Chinese fund and allowing the custodian
bank of an open-end Chinese fund to handle relevant capital inflow
or outflow formalities on a weekly basis according to the net
balance for fund subscription purchase and redemption, provided that
the net cumulative amount of a fund remitted abroad on a monthly
basis shall not exceed 20% of the total domestic assets of the said
fund as at the end of the preceding year. The Announcement further
makes amendments regarding specified procedural requirements as
well.
The full Chinese text of the Revised Provisions is
available here.
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The Measures for
Enjoyment of Relevant Treatment by Foreigners Permanently Residing
in China Released
Twenty-five departments,
including the Central Organization Department of the Communist Party
of China, the Ministry of Human Resources and Social Security, and
the Ministry of Public Security, jointly released the Measures for
Enjoyment of Relevant Treatment by Foreigners Permanently Residing
in China (the "Measures") on September 25, 2012. The Measures became
effective on the date of release; however, they were not published
until December 11, 2012.
The Measures apply to the foreigners
who have obtained a Foreigner's Permanent Residence Permit. Such
foreigners are, in principle, entitled to enjoy the same rights and
undertake the same obligations as Chinese citizens, except for those
political and special rights and obligations which Chinese laws and
regulations specifically stipulate that foreigners cannot enjoy or
undertake. Foreigners working in China with a Foreigner's Permanent
Residence Permit are entitled to enjoy the same benefits as Chinese
nationals in terms of employment, residence, visas, customs
clearance, investments, professional title, children's education,
social insurance, housing fund, house purchase, income tax, handling
of financial business, shopping, travelling, and obtaining a driving
license. In addition, the public security department will speed up
the processing of such foreigners' application for naturalization as
a Chinese national or restoration of Chinese nationality, based on
the applicable formalities.
The full Chinese text of the
Measures is available here.
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Five Ministries and
Commissions Jointly Release a Notice to Provide Visa and Residence
Facilities for Foreign High-level
Talent
On September 28, 2012, five
departments, including the Central Organization Department of the
Communist Party of China, the Ministry of Human Resources and Social
Security, the Ministry of Foreign Affairs, the Ministry of Public
Security, and the State Administration of Foreign Experts Affairs,
jointly released the Notice on Issues Concerning Providing Foreign
High-level Talent with Facilities for Visa and Residence in China
(the "Notice"). However, the Notice was not published until December
13, 2012.
According to the Notice, visa and residence
facilities can be provided to: (1) foreign high-level talent
introduced under the introduction plan of overseas high-level
talent, and their foreign national spouse and children under
18-years-old, or (2) a foreign national spouse and children under
18-years-of Chinese high-level talent introduced under the
introduction plan of overseas high-level talent.
The Notice
stipulates measures for providing visa and residence facilities: (1)
for multiple temporary exit/entry, qualified applicants can apply
for a long-term multiple-entry visa with five years' validity, which
is effective for multiple entries with the longest permitted stay of
180-days; (2) for working or residing in China for a long period,
qualified applicants can apply for a work permit or foreigner's
residence permit with two to five years' validity; (3) applicants
who are qualified for permanent residence can apply for permanent
residence; and (4) qualified applicants can obtain a Permit for
Expert Settling in China or Foreign Expert Permit. The Notice also
specifies detailed procedures for providing visa and residence
facilities.
The full Chinese text of the Notice is available
here.
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GAPP Seeks Public
Opinions on Administrative Measures for Online Publication Services
(Revised Draft for Comments)
On December 18,
2012, the General Administration of Press and Publication ("GAPP")
issued a notice seeking public opinions on the Administrative
Measures for Online Publication Services (Revised Draft for
Comments) (the "Draft"). The deadline for submission of comments is
January 10, 2013. The Draft will replace the Interim Provisions on
Internet Publication Administration issued by GAPP and the Ministry
of Information Industry in 2002. The Draft applies to online
publication services in the PRC. "Online publication services" are
defined as activities to provide online publications to the public
through information networks, and to provide services to others for
disseminating online publications. The Draft also defines the scope
of online publications. In order to provide online publication
services, an entity shall obtain approval from the relevant
publication administration authority and a License for Online
Publication Services. The Draft stipulates the requirements for an
entity to be eligible to provide online publication services.
Sino-foreign joint ventures, Sino-foreign cooperative ventures, and
wholly foreign-owned enterprises are not allowed to provide online
publication services. If any of these entities plans to cooperate,
with any entity providing online publication services in relation to
the business of online publication services, the entity providing
the online publication services shall report to GAPP to enable it to
conduct a security evaluation.
The Draft also provides other
rules and regulations relating to online publication service
licenses, administration of online publication services, supervision
and administration, guarantees and awards, and legal
responsibilities regarding online publication services.
The
full Chinese text of the Draft is available here.
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GAPP Seeks Public
Opinions on Administrative Measures for Overseas Press and
Publication Institutions Establishing Offices in China (Draft for
Comments)
On December 18, 2012, the General
Administration of Press and Publication ("GAPP") issued a notice
seeking public opinions on the Administrative Measures for Overseas
Press and Publication Institutions Establishing Offices in China
(Draft for Comments) (the "Draft"). The deadline for submission of
comments is January 10, 2013. The Draft defines an "Office" as an
office which is established in China: (1) by a publication
institution based in a foreign country, Hong Kong, Macao or Taiwan
active in the business of newspapers, journals, books, audiovisual
products, electronic publications, or online publications, or (2) by
an intermediary institution or an agent based in a foreign country,
Hong Kong, Macao or Taiwan conducting business related to press and
publications, and which in either case operates non-profit
activities relevant to such an institution's or agent's business. An
Office is not qualified to be a legal person. According to the
Draft, China will adopt a licensing system for the establishment of
such Offices, and GAPP and the State Council Information Office are
responsible for approving their establishment. The Offices can
operate non-profit activities such as acting as a point of contact,
communication, consultation and reception, however they shall not
operate business activities relevant to press and
publications.
The Draft also specifies requirements,
procedures and documents necessary for establishing Offices in China
as well as license renewal, annual review and other issues for the
Offices.
The full Chinese text of the Draft is available here.
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