State Administration of Foreign Exchange: Further optimize policies to facilitate cross-border investment and financing

On October 23, the State Administration of Foreign Exchange (SAFE) solicited public comments on the "Notice on Matters Concerning Further Optimizing Policies to Facilitate Cross-Border Investment and Financing." Among other things, it proposed expanding high-level openness in cross-border financing. First, expand the scope of entities eligible for cross-border financing facilitation. Technology enterprises such as innovative small and medium-sized enterprises, manufacturing single-champion enterprises, science and technology reform demonstration enterprises, (national) enterprise technology centers, enterprises in the intelligent factory tiered cultivation system (advanced level and above), and enterprises on the Ministry of Agriculture and Rural Affairs key laboratory list may borrow foreign debt within a quota of no more than the equivalent of USD 10 million. Second, lower the risk conversion factor coefficient for the affiliated enterprise borrowing category, making it easier for enterprises to allocate funds more flexibly. Third, promote the green foreign debt policy nationwide. Under the macroprudential management model, for eligible enterprises borrowing foreign debt for green development or low-carbon transition projects, the category risk conversion factor will be lowered from 1 to 0.5. Fourth, promote nationwide the sharing of foreign debt quotas between financial leasing parent companies and subsidiaries. Nationwide promotion of financial leasing parent-subsidiary sharing of foreign debt quotas. Under the macroprudential management model, when a financial leasing company subsidiary has insufficient foreign debt quota of its own, it may use its parent company's unused foreign debt quota to borrow foreign debt. The full text is as follows: Notice of Public Solicitation of Comments on the "Notice of the State Administration of Foreign Exchange on Matters Concerning Further Optimizing Policies to Facilitate Cross-Border Investment and Financing (Draft for Comment)" To continuously deepen high-level openness of capital account items and better leverage the role of financial services in supporting the real economy, the State Administration of Foreign Exchange has drafted the "Notice of the State Administration of Foreign Exchange on Matters Concerning Further Optimizing Policies to Facilitate Cross-Border Investment and Financing (Draft for Comment)" (hereinafter referred to as the "Notice") and is now soliciting public comments. The public may submit comments through the following channels: 1. Send comments by email to: [email protected] (please indicate "Cross-Border Investment and Financing Public Consultation" in the email subject line). 2. Send comments by letter to: Comprehensive Analysis Division, Capital Account Management Department, State Administration of Foreign Exchange, No. 30 Financial Street, Xicheng District, Beijing (Postal Code: 100033), and please indicate "Cross-Border Investment and Financing Public Consultation" on the envelope. 3. Fax comments to: 010-68402208. The deadline for feedback is November 22, 2026. State Administration of Foreign Exchange October 23, 2026 Notice of the State Administration of Foreign Exchange on Matters Concerning Further Optimizing Policies to Facilitate Cross-Border Investment and Financing (Draft for Comment) To the branches of the State Administration of Foreign Exchange in all provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning, and all nationwide Chinese-funded banks: To continuously deepen high-level openness of capital account items and better leverage the role of financial services in supporting the real economy, the State Administration of Foreign Exchange has decided to further optimize policies to facilitate cross-border investment and financing. The relevant matters are hereby notified as follows: I. Raise the level of facilitation for direct investment (1) Facilitate direct settlement and payment of capital account income. Domestic institutions may, within a certain amount, directly settle and pay capital account income (referring to capital funds and foreign debt funds) into domestic RMB accounts by presenting a payment instruction letter, and the use of funds shall comply with the negative list requirements for the use of capital account income. The amount of direct settlement and payment of capital account income shall not exceed the equivalent of USD 500,000 per month. The relevant provisions on domestic institutions using capital account income under the name of petty cash shall no longer be implemented. (2) Facilitate the remittance of petty cash for outbound direct investment. Where a domestic institution remits funds under the name of petty cash for daily small operating expenses of overseas enterprises such as rent, utilities, personnel, office, transportation, taxes and fees, and miscellaneous procurement, it may handle the matter at a bank by presenting a commitment letter on the overseas use purpose of the petty cash. The remittance of petty cash for outbound investment shall not exceed the equivalent of USD 200,000 per month and shall not cumulatively exceed 10% of the remittance quota registered for the domestic institution's outbound direct investment. Where petty cash is not used for the committed purpose, it will be investigated and dealt with in accordance with law. (3) Simplify the review materials for remittance of outbound direct investment funds. Where a domestic institution makes multiple foreign exchange payments for the same overseas fund use purpose and handles fund remittance again at the same bank branch, the bank may, based on the circumstances of the first handling and its understanding of the customer and business, be exempt from reviewing repetitive proof materials for the fund use purpose. (4) Optimize the review of remittance of outbound direct investment funds. Where, due to special reasons such as pre-verification capital requirements for the overseas investment project or paid-in registration requirements in the investment destination country or region, it is temporarily impossible to provide in advance the authenticity proof materials for the relevant fund use purpose, the domestic institution may first handle fund remittance by presenting other materials besides the authenticity proof materials for the fund use purpose, as well as an explanation of the fund use plan and a commitment letter to supplement materials later, and must complete the relevant materials within the commitment period or before the next remittance (whichever comes first). The amount of a single remittance shall not exceed 20% of the remittance quota registered for the domestic institution's outbound direct investment and shall not exceed the equivalent of USD 5 million. The handling bank shall review the reasonableness of the reasons why the enterprise is temporarily unable to provide the relevant materials, and whether the period for supplementing materials as committed matches the fund use plan; after the funds are remitted, it shall urge the enterprise to promptly supplement and submit the authenticity proof materials for the fund use purpose within the committed period. II. Expand high-level openness in cross-border financing (5) Expand the scope of entities eligible for cross-border financing facilitation. Technology enterprises such as innovative small and medium-sized enterprises, manufacturing single-champion enterprises, science and technology reform demonstration enterprises, (national) enterprise technology centers, enterprises in the intelligent factory tiered cultivation system (advanced level and above), and enterprises on the Ministry of Agriculture and Rural Affairs key laboratory list may borrow foreign debt within a quota of no more than the equivalent of USD 10 million. Among them, eligible enterprises selected by relevant departments relying on the "innovation points system" may apply within a quota of no more than the equivalent of USD 20 million. (6) Lower the risk conversion factor coefficient for the affiliated enterprise borrowing category. Under the macroprudential management model, where an eligible foreign-invested enterprise borrows foreign debt from an overseas affiliated enterprise, its category risk conversion factor shall be lowered from 1 to 0.5. (7) Promote the green foreign debt policy nationwide. Under the macroprudential management model, where an eligible enterprise borrows foreign debt for green development or low-carbon transition projects, its category risk conversion factor shall be lowered from 1 to 0.5. (8) Promote nationwide the sharing of foreign debt quotas between financial leasing parent companies and subsidiaries. Under the macroprudential management model, when a financial leasing company subsidiary has insufficient foreign debt quota of its own, it may use its parent company's unused foreign debt quota to borrow foreign debt. III. Optimize registration management for capital account business (9) Allow outbound direct investment registration to be handled outside the locality. Where necessary for business, a domestic institution may handle outbound direct investment registration and modification or deregistration registration at a bank outside the locality within the jurisdiction of the provincial branch of the foreign exchange administration to which it belongs. The out-of-locality handling bank shall properly review the authenticity and compliance of the registration business. (10) Allow certain registrations involved in loans by domestic banks' offshore departments to be handled directly by banks. Under the macroprudential management model, where an eligible non-financial enterprise debtor borrows an offshore loan from the offshore department of a domestic bank, upon drawdown/repayment of principal and interest, it may handle the non-fund-transfer drawdown/repayment of principal and interest registration at a bank within the jurisdiction of the provincial branch. (11) Expand the scope of capital account business handled "online." Domestic institutions are allowed to submit applications online through the State Administration of Foreign Exchange Digital Foreign Exchange Platform for relevant capital account administrative licensing business such as overseas derivative business, domestic guarantee for overseas loans, domestic institution overseas lending, and external claims formed by the performance of domestic guarantee for overseas loans. For the specific operation of the above policies, see the "Operational Guidelines for Optimizing Cross-Border Investment and Financing Policies" (Appendix 1, hereinafter referred to as the "Operational Guidelines"). Banks shall, in accordance with the principle of business conduct, properly conduct authenticity and compliance review and post-event monitoring of the above cross-border investment and financing business, and promptly screen and intercept abnormal transactions and report them. Foreign exchange administrations at all levels shall strengthen ongoing and post-event supervision and verification inspections, and guide banks and enterprises to conduct business in compliance. Where banks and enterprises fail to handle matters in accordance with this Notice and the Guidelines, the foreign exchange administration shall impose penalties in accordance with the "Regulations of the People's Republic of China on Foreign Exchange Administration." This Notice shall take effect on [month] [day], *. Where previous provisions are inconsistent with this Notice, this Notice shall prevail. Adjustments to some clauses in previous foreign exchange administration regulatory documents are set out in Appendix 2. Cross-border RMB investment and financing related business may apply the policies of this Notice. After receiving this Notice, all branches shall promptly forward it to the prefecture-level branches, city commercial banks, rural commercial banks, foreign-funded banks, and rural cooperative banks within their jurisdictions; all nationwide Chinese-funded banks shall, after receiving this Notice, promptly forward it to their branches under their jurisdiction. If any problems are encountered during implementation, please promptly report them to the State Administration of Foreign Exchange. Hereby notified. This article is excerpted from the official website of the "State Administration of Foreign Exchange," edited by GMTEight's Xu Wenqiang.