New Regime on Cross Border Financing in China
19 May 2016
The People’s Bank of China (PBOC) issued the Notice on Nationwide Implementation of Macro Prudential Management of Cross Border Financing (the Notice) which took effect on 3 May 2016 and fundamentally changes the regulation on the incurrence of cross border debt by PRC Enterprises. The Notice introduces a new regime (the New Regime) to determine the amount of foreign debt a PRC incorporated entity may borrow based on its net asset value / capital and outstanding borrowings, in each case on a risk weighted basis. The New Regime is fundamentally different from the previous regime where different methods administered by different authorities apply to determine the amount of foreign debt a domestic company or a foreign investment enterprise may borrow.
To read the full ePublication, please click here.
If you would like to learn additional information or have questions, please do not hesitate to contact any of the lawyers mentioned.