China (Fujian) Pilot Free Trade Zone [Photo/VCG]

China (Fujian) Pilot Free Trade Zone recently announced that it will be reforming its foreign exchange administration, aiming to make it more convenient for local enterprises to use capital. 

The innovative policies mainly include the following items: 

The free trade zone will experiment with a more convenient mode of payment for foreign exchange income earned through capital account transactions. In terms of domestic payment, there is no need to submit authentication documents in advance, and eligible banks can handle the payments. 

Restrictions on foreign exchange registration for domestic direct investment will be loosened. Enterprises in the FTZ can handle basic registration, alteration and cancellation procedures for domestic direct investment at any banks under the management of the Fujian Branch of the State Administration of Foreign Exchange. 

Non-investment foreign-invested enterprises in the FTZ are encouraged to receive domestic equity investment under the premise of authenticity and compliance. In accordance with their actual investment scale, the enterprises are allowed to use foreign exchange income from capital account transactions, or RMB obtained from foreign exchange settlement for domestic equity investment. 

Enterprises can adjust their mode of foreign borrowing from the current system based on the difference between their total investment and registered capital to a macro-prudential management model for cross-border financing. 

On the basis of withdrawal currency and repayment currency being the same type, inconformity is permitted between contract currency and the first two. 

Enterprises in the FTZ are allowed to directly manage the registration cancellation of their foreign borrowing in banks under the management of the Fujian Branch of the State Administration of Foreign Exchange without time limit.