China announced another modest easing of foreign exchange controls Monday, allowing offshore investment and financing through special purpose entities (SPEs).
SPEs are legal entities created overseas to isolate a firm from financial risk or even to hide ownership or debts.
Citizens can invest onshore assets or equities in offshore SPEs after they register at with State Administration of Foreign Exchange (SAFE) and can trade in foreign currencies to raise capital for offshore SPEs. SAFE also removed the restriction on domestic enterprises transferring assets or equities to offshore SPEs.
It is no longer necessary for SPEs to remit profits, bonuses or income from capital changes within 180 workdays, according to the SAFE document.
The new rules are the latest step in the internationalization of the yuan.
Source: Xinhua
