Foreign Exchange Administration

The State Administration of Foreign Exchange (SAFE) and local administrations of foreign exchange are responsible for foreign exchange supervision and control.

In accordance with the relevant regulations, China implements the management of foreign exchange registration for foreign investors’ domestic direct investment (DDI). Organizations and individuals involved in DDI activities must apply for foreign exchange registration before engaging in such transactions. Starting from June 2015, foreign-invested enterprises are entitled to complete foreign exchange registration with banks in their place of registration at its option.

The required documents for opening a foreign exchange account:

1. Application Form for Opening of Foreign Exchange Current Account

2. Original and photocopy of Business License or Association Registration Certificate

3. Original and photocopy of the Foreign-related Business Operation License issued by the authorities, the Foreign Exchange License of the Foreign Invested Enterprises, or the proof materials relating to the foreign exchange income of the current account (such as the remittance sheet, etc.)

4. Original and photocopy of the Organization Code Certificate

5. Other materials required by the State Administration of Foreign Exchange.

Steps:

First, the foreign-invested enterprise (FIE) shall be approved by and registered at the Ministry of Commerce or its authorized organs;

Second, the FIE shall obtain a Business License issued by the administration of industry and commerce;

Third, the FIE shall apply for the Foreign Exchange License of the Foreign -invested Enterprises to the administration of foreign exchange in the place where it registered with required documents;

Fourth, the FIE shall apply for the opening of a capital account to the administration of foreign exchange in the place where it registered and then obtain an approval certificate for opening a foreign exchange account;

Fifth, the FIE shall go to banks with foreign exchange business or other financial institutions to open the account with the approval certificate;

Sixth, if the bank is authorized to approve foreign exchange capital settlement by the administration of foreign exchange, the FIE can go through the capital settlement procedures with required documents at the bank; otherwise, it shall apply for capital settlement to the administration of foreign exchange with required documents first and then go through the capital settlement procedures with the approval certificate issued by the administration.

The use of capital and renminbi funds obtained through the foreign exchange  settlements of foreign-invested enterprises shall follow the principles of authenticity and self-use within the scope of business. It shall also comply with foreign exchange regulations. Foreign investors are entitled to freely conduct inward and outward remittance of their investment in RMB or foreign exchange when it comes to their contribution of capital, profits, and capital gains within the territory of China.