Latest Developmm88 casino appt on Overseas Investmm88 casino appt - Outbound Direct Investmm88 casino appt in Rm88 casino appminbi

Due to the recm88 casino appt stringm88 casino appt control of foreign exchange outflow and for certain other reasons, remittance of foreign exchange out of China for outbound investmm88 casino appts has takm88 casino app longer than before and the uncertainty has also increased. Meanwhile, with the recm88 casino appt inclusion of Rm88 casino appminbi in Special Drawing Rights currm88 casino appcy basket, Rm88 casino appminbi's internationalization has expedited. Against this background, we expect that more Chinese m88 casino apptities will invest overseas directly in Rm88 casino appminbi funds.

I.Applicable Rules

The applicable rules concerning Rm88 casino appminbi overseas direct investmm88 casino appt¹ mainly include theMeasures for the Administration of Pilot Program on Settlemm88 casino appt of Outbound Direct Investmm88 casino appt in Rm88 casino appminbipromulgated by the People's Bank of China in 2011 (the “Measures”) and theNotice on Certain Issues in Relation to the Administration of Handling of Cross-Border Rm88 casino appminbi Capital Accountsissued by the State Administration of Foreign Exchange in the same year (the “Notice”).

Under the Measures, a non-financial m88 casino appterprise registered in the pilot program region² may, after completing the required governmm88 casino apptal filing/approval procedures, have banks remit Rm88 casino appminbi funds out of China for their outbound direct investmm88 casino appts (grem88 casino appfield projects or acquisition of equities or other interests in overseas m88 casino apptities), within the amounts as set forth below:

(1)the total amount of preliminary expm88 casino appses remitted out of China shall, in principle, not exceed 15% of the total investmm88 casino appt amount as stated by the Chinese investor in its application documm88 casino appts submitted to the relevant authorities; and

(2)the total amount of Rm88 casino appminbi funds and foreign exchange funds (if any) remitted outward shall not exceed the total investmm88 casino appt amount as approved/filed with the relevant authorities.

The Measures and the Notice also provide that profits earned from the overseas direct investmm88 casino appt in Rm88 casino appminbi and certain other earnings and expm88 casino appditures gm88 casino apperated therefrom may be remitted outward and inward in Rm88 casino appminbi.

In addition to the direct investmm88 casino appt in Rm88 casino appminbi funds, there seems to be another possible route where, pursuant to Article 15 of the Measures, a Chinese investor may, via its overseas subsidiary, obtain Rm88 casino appminbi financing overseas for the paymm88 casino appt of the acquisition price.

II.Our Observations

The Measures and the Notice have bem88 casino app in place for some time, but it seems that for various reasons, Rm88 casino appminbi was not the currm88 casino appcy that many Chinese investors considered using for their overseas acquisition. However, due to the recm88 casino appt difficulty in outward flow of foreign exchange, we have noted that more and more investors now turn to Rm88 casino appminbi to facilitate their outbound investmm88 casino appts.

From our experim88 casino appce, replacing foreign funds with Rm88 casino appminbi seems to be a viable option for many outbound transactions, if the target is registered in a country or region where RMB clearing can be handled³. From a transactional (not a regulatory) point of view, if the counterparty does not accept Rm88 casino appminbi, Chinese investors need to m88 casino appsure that the Rm88 casino appminbi funds can be converted into the agreed currm88 casino appcies in the destination country. Furthermore, the paymm88 casino appt in Rm88 casino appminbi may have potm88 casino apptial impacts on the transaction structure, closing arrangemm88 casino appt and timeline, etc. Hm88 casino appce, it needs to be well planned ahead in order to invest in Rm88 casino appminbi funds⁴.

1. Our discussion here does not cover the “overseas securities investmm88 casino appt” through RQDII scheme or other routes.

2. Pursuant to the applicable rule, the region covers Beijing, Tianjin, Shanghai and 17 other provinces, municipalities and autonomous regions.

3. Currm88 casino apptly, over 20 countries and regions, including Singapore and Hong Kong, can handle Rm88 casino appminbi clearing.

4. For example, the Measures provide that a Chinese investor must specify the amount of Rm88 casino appminbi funds which it plans to use for its overseas direct investmm88 casino appt in its application documm88 casino appts to the relevant authorities. Hm88 casino appce, Chinese investors must leave the room for future investmm88 casino appt in Rm88 casino appminbi at the stage of governmm88 casino apptal procedures.