The Shanghai branch of the State Administration of Foreign Exchange issued a notice on Jan 23, launching a pilot program for the high-level opening-up of cross-border trade and investment.

The aim is to boost cross-border trade and investment, streamline processes for more businesses and promote high-quality development through increased openness.

Here are the key points:

1. Facilitating forex for current account transactions:

Prudent and compliant banks can handle high-quality enterprises’ current account transactions in foreign exchange. For any transaction in service trade or other projects with foreign exchange expenditures exceeding $50,000, verification can be done afterwards using the tax filing form for outward payments of service trade and other projects.

2. Optimizing new international trade settlements:

Encouraging prudent and compliant banks to innovate financial services, especially for genuine and compliant new international trade transactions with high-quality enterprises.

3. Expanding scope of trade balance settlement netting:

Prudent and compliant banks can handle settlement netting for specific current account foreign exchange transactions between high-quality enterprises and the same overseas trading partners under the premise of controllable risk.

4. Exemptions from special-refund registration for goods trade:

Prudent and compliant banks can directly handle special refunds for high-quality enterprises’ goods trades, without pre-registration with the foreign exchange authority.

5. Optimizing the advance payments or busness sharing management for service trade:

After verifying their authenticity and reasonableness, prudent and compliant banks can process transactions of advance payments or sharing of business for service trades between high-quality enterprises and their affiliated overseas institutions for a period exceeding 12 months, or their non-affiliated overseas institutions.

6. Shared foreign debt quotas for finance leasing companies:

Eligible finance leasing companies are allowed to share foreign debt quotas with their special purpose vehicles.

7. Registration exemption for reinvestment by foreign-funded firms:

When foreign-invested enterprises engage in domestic reinvestment activities, the Shanghai enterprises that receive the reinvestment and the equity transferors do not need to go through the registration procedures for receiving domestic reinvestment.

8. Forex registrations at banks for certain capital projects:

Non-financial enterprises meeting certain conditions can directly handle relevant registration procedures at the banks when contracting foreign loan or going public overseas.

This notice is effective from the date of issuance.

Source: news.cctv.com