FX Surrender under Capital Account

Product Introduction

It is applicable to the settlement of statutory capital of foreign businessman invested enterprises and foreign businessman investments with the same nature. The RMB fund acquired from the settlement of statutory capital of foreign businessman invested enterprises shall be used within the range of business approved by the approval department of the government; except otherwise specified, the RMB fund acquired from the settlement shall not be used for domestic equity investment; except for foreign businessman invested real estate enterprises, the RMB fund shall not be used to buy domestic real estate which is not for self use; related stipulations of China shall be executed for the use of the RMB fund in securities investment. As for an investment orientated foreign businessman invested enterprise engaging in domestic equity investment, of which the establishment is approved by the business department in charge, the domestic transfer of its statutory capital can be processed only after it is approved by the SAFE.

Business Procedure

1.The customer opens a capital account at CGB; overseas investment remittance can go directly into this account;

2.The foreign businessman invested enterprise apply for statutory capital settlement with the bank, before this the enterprise shall have the statutory capital verified by an accountant firm. The accountant firm issues a capital verification report to the enterprise after it has verified the capital at the SAFE. The bank shall not settle the statutory capital of which the verification is not processed. The accumulated amount of the statutory capital settled by the bank for the foreign businessman invested enterprise shall not exceed the accumulated account of the verified statutory capital of that foreign businessman invested enterprise.

3.The RMB fund acquired from the settlement of statutory capital of foreign businessman invested enterprises shall be used within the range of business approved by the approval department of the government.

4.For the processing statutory capital settlement, the customer shall submit the following documents to CGB, which will settle the statutory capital after the examination:

(1)The foreign exchange registration IC card of the foreign business invested enterprise.

(2)The letter of payment order for the RMB fund acquired from statutory capital settlement. The letter of payment order refers to a written directive issued by the enterprise or individual, based on which the bank pays the RMB fund acquired from statutory capital settlement.

(3)Documents to prove the purpose of the RMB fund acquired from statutory capital settlement. Including the commercial contract and the payment notice issued by the payee; the payment notice shall contain the main clauses of the commercial contract, amount, payee name, bank account number, and fund purpose. For the enterprise to use the RMB fund acquired from statutory capital settlement to pay back the RMB loan, it shall submit a letter describing that this loan fund has been used within the range of business agreed in the contract.

(4)The accountant firm issues the latest capital verification report (attached with a letter of reply to the letter of inquiry about the capital invested by the foreign party).

(5)A copy of related vouchers such as related vouchers regarding the outward payments made by the RMB fund acquired from previous statutory capital settlement according to the letter of payment order, a detailed list of its usage information, and invoices affixed with an official stamp or financial stamp. If this settled fund is a once-for-all fund or the last transaction in installment settlement, the enterprise shall submit the said documents to the bank in 5 working days after settlement.

(6)Other documents considered necessary by the bank. For the settlement of an enterprise reserve fund of which the amount is equivalent to USD 50,000 or less, the enterprise is not required to submit the documents specified in provisions 3 and 5, and the interest accrued in its statutory capital account can be settled directly based on the list of interests issued by the bank.

Our Commitments

1.CGB can, at its own discretion, examine the documents and settle the fund within the range authorized by the SAFE;

2.The procedure is simplified and handy, so the customer does not have to handle the processing back and forth the SAFE, thus the enterprise’s investment capital operating efficiency is enhanced;

3.The accounting system of CGB automatically controls the maximum line of multi-currency accounts, and a prompt will be given automatically when the line is exceeded, which prevents the customer’s regulation violation as a result of line-exceeding account income to the maximum extent;

4.Via the “foreign exchange account management information system”, CGB reports the information regarding the income and expenditure statutory capital accounts, thus maintaining synchronous with the data of the SAFE.