China: The PRC centralizes RMB operations
Last year, the People?s Republic of China revised the policies already in place to further oil the wheels of cross-border operations for multinational enterprises active in the PRC.
(PresseBox) - In November 2014, the People?s Republic of China (PRC) issued the document ?Yin Fa [2014] No. 324? (hereinafter called ?Document No. 324?), deciding to start the centralized operation of cross-border renminbi funds and cross-border bilateral renminbi (RMB) capital pooling throughout the country.
Roughly one year later, in September 2015, the People?s Bank of China issued a more detailed document, ?Yin Fa [2015] No. 279? (hereinafter ?Document No. 279?), to help further facilitate the subsidiaries and groups of multinational enterprises engaging in cross-border bilateral renminbi capital pooling business.
Comparing the two documents issued in China on this topic, we can find that the access threshold as well as the maximum limit for such businesses have both been Last year, the People?s Republic of China revised the policies already in place to further oil the wheels of cross-border operations for multinational enterprises active in the PRC. China THE PRC CENTRALIZES RMB OPERATIONS further relaxed. Document No. 279 lowers the income access threshold of Chinese domestic member enterprises from RMB 5 billion to 1 billion. With it, it subsequently allows more and more multinational enterprises to benefit from the policy of cross-border bilateral renminbi capital pooling, reducing the list of forbidden enterprises to those in the Key Regulatory List, raising the upper limit of net inflow amount and relaxing the limit of capital resource. With the development of RMB internationalization to finance RMB through affiliates of overseas companies, this may be a convenient course for foreign- invested enterprises in China which does not occupy any foreign debt quota.
However, at the same time it should not be forgotten that in the PRC we actually have three different kinds of cash pooling opportunities. Besides the China-wide policy of cross-border bilateral renminbi capital pooling, enterprises may also consider the ?free trade zone? policy of renminbi capital pooling, which has an even lower access threshold, no quota limit, and does not require registration with the People?s Bank of China. In addition, in August 2015, the State Administration of Foreign Exchange issued the document ?Hui Fa [2015] No. 36?, which relaxes the policy of centralized operation of foreign exchange funds by multinational corporations. Depending on the kind of business you plan to expand in the PRC as well as the products and services you and your subsidiaries and groups are trading in and selling, the choice should be made wisely as to which of these opportunities best fits your situation and organization.
?In the PRC we have three different kinds of cash pooling opportunities. The choice should be made wisely as to what best fits your situation and organization.?
Yi Wang, C.P.A. (China) tax advisor (China) C.C.A. (Chartered Certified Accountant, ACCA), ECOVIS Ruide Certified Public Accountants Co., Ltd. Shanghai, yi.wang(at)ecovis.com
More information: www.ecovis.com/en/renminbi
Ecovis is a leading global consulting firm with its origins in Continental Europe. It has over 4,500 people operating in 60 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.
The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in the back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments - from preparation in the client''s home country to support in the target country.
In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues.
The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth.
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Ecovis is a leading global consulting firm with its origins in Continental Europe. It has over 4,500 people operating in 60 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.
The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in the back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments - from preparation in the client''s home country to support in the target country.
In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues.
The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth.
www.ecovis.com
Datum: 10.05.2016 - 07:20 Uhr
Sprache: Deutsch
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