In order to further clarify the relevant issues in the implementation and application of the Notice of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Management of Domestic Residents' Financing and Return Investment through Overseas Special Purpose Companies (hereinafter referred to as Document No.75), unify the standards and standardize the operation, the revised Document No.75 Operating Procedures (see the attached table) are hereby printed and distributed to you, and shall be implemented as of the date of promulgation of this Notice. Schedules 6 and 7 in the original Notice of the General Department of the State Administration of Foreign Exchange on Issuing the Operating Rules of the Notice on Improving Foreign Debt Management and the Notice on the Administration of Foreign Exchange Financing and Return Investment by Domestic Residents through Overseas Special Purpose Companies were stopped at the same time.
1. Remittance of funds and account opening of special purpose companies established by domestic residents.
Open a special foreign exchange account for capital account for domestic residents.
1. written application (explain in detail the time, reason, method, amount of income from capital change, bank to be opened, etc. of capital change of overseas special purpose company). ).
2. Domestic resident legal person provides business license, and domestic resident natural person submits legal identity certificate (if entrusting others to hold overseas rights and interests and repatriate the income, legal documents proving the entrustment relationship shall also be submitted).
3. The legal and valid transaction certificate of the capital change of the special purpose company (such as the equity disposal agreement, the resolution of the board of directors of the capital change of the special purpose company, the delivery slip of the overseas stock exchange for stock trading, etc.). ).
4. Foreign exchange registration certificate for overseas investment by domestic residents.
5. Foreign exchange registration certificate of domestic return investment enterprises.
6. Other authenticity certification materials.
Two. Settlement of funds in special foreign exchange accounts for related capital projects of special purpose companies.
1. Written application (indicating the bank, account number, purpose and amount of settlement, etc.).
2. Domestic resident legal person provides business license, and domestic resident natural person submits legal identity certificate (if entrusting others to hold overseas rights and interests and repatriate the income, legal documents proving the entrustment relationship shall also be submitted).
3. Written payment instructions paid directly to the designated payee.
4. The tax payment certificate of the tax authorities.
5. Other authenticity certification materials.
2. Domestic residents are natural persons who have re-registered the established special purpose company.
1. Written application (detailing the basic information of domestic enterprises and actual controllers, the shareholding structure and overseas financing of overseas special purpose companies, and the details of domestic investment of special purpose companies).
2. Approval certificate, business license and foreign exchange registration certificate of domestic foreign-invested enterprises controlled by the special purpose company.
3. Personal identification of residents.
4. Overseas business registration certificate of the special purpose company.
5. Fill in the Foreign Exchange Registration Form for Overseas Investment by Domestic Residents.
6. Other authenticity certification materials.
Third, special purpose companies handle foreign exchange registration changes and filing due to major capital changes.
1. Written application (the reasons for this change or filing should be explained in detail, the structure of the special purpose company and previous capital increase, capital reduction, equity transfer, equity swap, merger, division, foreign equity investment, external guarantee involving domestic assets, dividends, etc.). Since its establishment, it should be stated that "the special purpose company has gone through the formalities of foreign exchange registration, change and filing in accordance with the regulations, and obtained overseas financing funds and overseas dividends.
2. Overseas financing business plan (or prospectus).
3. The overseas legal person shall submit the foreign exchange registration certificate for overseas investment, and the domestic resident natural person shall submit the original foreign exchange registration form for overseas investment of domestic residents and fill in the new foreign exchange registration form for overseas investment of domestic residents.
4. Foreign exchange registration certificate of foreign-invested enterprises that return investment enterprises.
5. Overseas financing agreement (overseas listing is not required).
6. Other authenticity certification materials to prove major capital changes of the special purpose company.
Fourth, the establishment of special purpose companies, mergers and acquisitions of domestic enterprises in foreign exchange registration.
Written application. The written application shall explain in detail the equity and management structure of the overseas special purpose company, as well as the previous capital increase, capital reduction, equity transfer, equity distribution, merger, division, foreign equity investment, external guarantee involving domestic assets, dividends and other matters since its establishment and control, and explain that "the special purpose company has gone through the formalities of foreign exchange registration, change and filing according to regulations, and the overseas financing funds, overseas dividends and capital change income obtained have been remitted back to China according to regulations. If there is a false statement,
2. A copy of the business license of the domestic target enterprise as a legal person, and the unincorporated Chinese-foreign cooperative enterprise shall provide the business license.
3. The approval documents and certificates of the Ministry of Commerce approving the investment in China.
4. Contracts and articles of association of foreign-invested enterprises that have been approved and come into effect.
5. Organization code certificate.
Note: All the above materials must be inspected and stamped with the original.
6. The foreign exchange registration certificate for overseas investment corresponding to the special purpose company or the foreign exchange registration form for overseas investment by domestic residents.
7. Fill in the basic information registration form of foreign-invested enterprises.
Article 5 Foreign exchange registration of overseas investment of newly established special purpose companies by domestic residents with equity of assets of domestic enterprises.
I. Domestic resident legal persons
1. Written application (detailing the basic situation of domestic enterprises, the shareholding structure of overseas special purpose companies and overseas financing arrangements).
2. Overseas financing business plan.
The business plan for overseas financing shall include the following basic contents:
(1) Industry, development history and financial status of domestic enterprises in recent 3 years;
(2) Basic information of the actual controller and management;
(3) Market prospect, market development strategy, development planning, financial forecast and market risk analysis of domestic enterprises;
(4) The process, control mode, legal arrangement and feasibility analysis of subsequent financing of domestic residents transferring domestic assets to special purpose companies, and an explanation of the investment relationship between domestic residents and the domestic enterprises they control or the special purpose companies to be established or controlled;
(5) If there is a special purpose company, the shareholding ratio of domestic residents shall be disclosed.
(6) Introduction of the proposed financing method, financing amount and basic information of overseas financing institutions, and the financing intention and memorandum reached with overseas financing institutions. If bridge loan is used for financing, the financing interest rate, term and source of repayment funds shall be stated; Where financing is made by private placement or public offering (including convertible bonds), the pricing method of assets or equity of the special purpose company shall be explained; If the above two methods are used to plan financing by stages, the relevant information shall be explained together; If the owned overseas rights and interests are injected into an overseas special purpose company, the reasons and processes for the legal acquisition and existence of overseas rights and interests shall be explained.
(7) Description of overseas financing fund use plan, including overseas investment plan, financing fund repatriation plan and feasibility analysis of repatriation mode.
3, overseas investment in foreign exchange funds (assets) sources for examination and approval.
4. Fill in the Basic Information Registration Form for Overseas Investment and the Foreign Exchange Registration Certificate for Overseas Investment.
5. Approval Certificate for Overseas Investment in People's Republic of China (PRC) issued by the competent commerce department.
6. Other authentic supporting materials (such as overseas financing agreement or memorandum of financing and investment).
Second, domestic residents and natural persons.
1. Written application (detailing the basic situation of domestic enterprises, the equity structure of special purpose companies and overseas financing arrangements).
2. Identification certificate of natural person of domestic residents.
3. Registration documents and recent accounting and financial audit reports of domestic enterprises to be financed overseas.
4. Overseas financing business plan. The business plan for overseas financing shall include the following basic contents:
(1) Industry, development history and financial status of domestic enterprises in recent 3 years;
(2) Basic information of the actual controller and management;
(3) Market prospect, market development strategy, development planning, financial forecast and market risk analysis of domestic enterprises;
(4) The process, control mode, legal arrangement and feasibility analysis of subsequent financing of domestic residents transferring domestic assets to special purpose companies, and an explanation of the investment relationship between domestic residents and the domestic enterprises they control or the special purpose companies to be established or controlled;
(5) If there is a special purpose company, the shareholding ratio of domestic residents shall be disclosed.
(6) Introduction of the proposed financing method, financing amount and basic information of overseas financing institutions, and the financing intention and memorandum reached with overseas financing institutions. If bridge loan is used for financing, the financing interest rate, term and source of repayment funds shall be stated; Where financing is made by private placement or public offering (including convertible bonds), the pricing method of assets or equity of the special purpose company shall be explained; If the above two methods are used to plan financing by stages, the relevant information shall be explained together; If the owned overseas rights and interests are injected into an overseas special purpose company, the reasons and processes for the legal acquisition and existence of overseas rights and interests shall be explained.
(7) Description of overseas financing fund use plan, including overseas investment plan, financing fund repatriation plan and feasibility analysis of repatriation mode.
5. Fill in the Foreign Exchange Registration Form for Overseas Investment by Domestic Residents.
6. If the controller is entrusted to handle the foreign exchange registration procedures for overseas investment, the corresponding power of attorney shall be provided.
7. Other authentic supporting materials (such as overseas financing agreement or memorandum of financing and investment).
Article 6 The change of foreign exchange registration of overseas investment by domestic resident legal person, overseas investment enterprise and special purpose company.
1. An application by a domestic resident legal person to register its overseas investment enterprise as a special purpose company for return investment (including the time and place of establishment of the overseas enterprise, the source of return investment funds, operating conditions, enterprise type, etc.);
2. The approval document of the competent department of the invested overseas enterprise;
3. Business registration certificate of the invested overseas enterprise;
4, overseas investment enterprises to participate in the joint annual inspection of overseas investment;
5. Overseas financing business plan (or prospectus);
6 overseas audit reports of the invested overseas enterprises in the past three years;
7. Foreign exchange registration certificate for overseas investment;
8. Other authentic proof materials (such as overseas financing agreement or financing investment memorandum, etc.). ).
Article 7 Domestic residents and natural persons who inject overseas rights and interests and return to invest in special purpose companies for foreign exchange registration of overseas investment.
1. Domestic resident natural persons inject their overseas rights and interests into overseas enterprises for return investment, and handle foreign exchange registration of overseas investment of special purpose companies for overseas enterprises (including types and sources of overseas rights and interests, time and place of establishment of overseas enterprises, business situation, enterprise type, introduction of all domestic enterprises that have invested, etc.); An application for registration submitted by a domestic resident natural person shall contain the following contents; "The source of rights and interests of all the assets I have invested overseas conforms to the laws of China and the place of registration, and there are no illegal and criminal acts such as evasion, fraud, money laundering, etc. I have fully fulfilled my tax obligations as a resident of China, and I am willing to bear the legal responsibilities caused by false statements."
2. Identification certificate of natural person of domestic resident;
3. The latest accounting and financial audit report of the invested enterprise.
4. The business registration certificate of the invested overseas enterprise and the relevant certificates that the domestic resident natural person holds the equity of the enterprise.
5. Audit reports and tax payment certificates of the invested overseas enterprises in the last two years (overseas scientific and technological R&D enterprises can be shortened to one year);
6. The approval certificate of foreign-invested enterprises issued by the competent commerce department to the returned investment enterprises;
7. Foreign exchange registration certificate of foreign-invested enterprises that have invested in domestic enterprises in the early stage;
8. Fill in the Foreign Exchange Registration Form for Overseas Investment by Domestic Residents;
9. Other authentic supporting materials (such as overseas financing agreement or memorandum of financing and investment).
Document 106, foreign exchange document 106, return investment document 106, Huizong Fa 2007 document 106, safe document 106, safe document 106.
For the document 106 issued by safe, some people think that the operating rules are cumbersome and invalid, so they simply shelve it; Someone vaguely saw some operating space and tried to put it into practice.
Since August, the policy of "the return of red chips" has undergone a subtle reversal. Red-chip companies such as China Mobile (HKEx code: 094 1) and China Overseas (HKEx code: 0688), which once sang "Go Back", have given up, saying that they will temporarily "shelve the return plan". The contradiction between the H-share market and the A-share market in the competition for listing resources in the Mainland has become increasingly prominent.
After reaching the peak of IPO scale last year, the prosperity of the H-share market seems to be fading, facing a double crisis: on the one hand, listed red-chip companies will definitely return to mainland A-shares, which will inevitably divert the listing resources of H-shares and weaken their market influence; On the other hand, the listing resources of A-share itself are increasingly tight, and domestic regulators do not encourage domestic enterprises to list overseas. Not only can state-owned enterprises not be listed overseas, but the road of "red chips" of private enterprises has also been blocked.
Since the six ministries and commissions issued "Order 10" on September 8, last year (regulations on foreign investors' merger and acquisition of domestic enterprises), there has not been a case in which China enterprises successfully acquired domestic assets overseas and listed them by setting up a new overseas SPV (Special Purpose Company).
"It's really difficult to do business now." A well-known lawyer working in an overseas financing institution said in an interview with the reporter of Financial Practice, "In the past, we had a meeting to discuss which industries were suitable for overseas fund investment and the income was higher; Now we are discussing how to invest in overseas funds, and everyone is racking their brains to find a way. " In fact, this year, in the field of PE/VC, foreign investment banks, lawyers and accountants have complained endlessly.
The game between market and supervision will never stop. There are still many enterprises that want to go public and raise funds overseas for various needs, especially the foreign venture capitalists behind these enterprises, hoping to realize the withdrawal of all-market investment overseas.
The policy is rather confusing. The Ministry of Commerce, the China Securities Regulatory Commission and other regulatory authorities do not comment publicly, and the relevant operating rules of the 10 directive are being worked out indefinitely. Only in May and June of this year, the State Administration of Foreign Exchange issued a Notice of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Management of Domestic Residents' Financing and Return Investment through Overseas Special Purpose Companies (hereinafter referred to as document 106), but this document was only issued by the State Administration of Foreign Exchange, which is quite mysterious. There are also different reactions in the field of operation. Some people think that the operating rules are cumbersome and ineffective, so they simply put them on the shelf. Someone vaguely saw some operating space and tried to put it into practice.
In any case, document 106 has become the latest plot of "containment" and "breakthrough" of overseas red chip listing.
The core of document 106
Document 106 is the supporting operating rules of Document No.75 of SAFE in 2005. However, some details of document 106 have also been interpreted by many people in the industry as increasing the difficulty of foreign investment in China. However, some lawyers who are used to "looking for hope in despair" have found a "vague loophole" for the red-chip listing of domestic private enterprises in the cumbersome provisions of document 106.
Circular 75 explicitly allows domestic residents (including legal persons and natural persons) to set up overseas financing platforms in the form of special purpose companies, engage in various equity financing activities in the international capital market through capital operation modes such as reverse mergers and acquisitions, equity swap and convertible bonds, and legally use overseas financing to meet the capital needs of enterprise development. Therefore, it is generally regarded as "significant positive" by venture capital industry and enterprises trying to list overseas red chips.
The core content of the document. 106 Requirements and regulations on foreign exchange registration of overseas investment: domestic residents set up SPV by injecting domestic assets, and use SPV for return investment. Setting up SPV overseas (mainly in tax havens such as British Virgin Islands and Bahamas) is a necessary link in the process of venture capital companies investing in domestic enterprises and red-chip listing of domestic enterprises.
According to document 106, SPV established or controlled by domestic residents must be registered in foreign exchange for overseas investment according to document 75. Regarding the requirements of foreign exchange registration, document 106 makes detailed provisions on the foreign exchange registration required for overseas investment according to two different sources of assets that domestic residents "directly establish or indirectly control" SPV. In the indirect control of SPV, it can be divided into two forms: injection by domestic resident natural persons with overseas rights and interests or direct conversion to SPV by domestic resident legal persons with overseas enterprises.
On the injection of overseas rights and interests by domestic natural persons into special purpose companies. 106 clearly stipulates that "if it is impossible to prove the legality of overseas rights and interests or the overseas continuous operation time is insufficient, and it is impossible to provide the audit report and tax payment certificate for the last two years (overseas technology research and development enterprises can be shortened to one year), domestic resident natural persons may not go through the formalities of establishing a special purpose company with overseas rights and interests, and may not engage in return investment." For overseas companies to directly convert to SPV and return their investment, document 106 requires that overseas audit reports of overseas companies in the last three years be provided when conducting foreign exchange registration review.
Insiders pointed out that this clause actually requires assets to be transferred abroad for at least two years before they can engage in return investment; Without the two-year audit report and tax payment certificate, it is impossible to register the relevant foreign exchange. But in reality, if venture capital companies are optimistic about domestic enterprises and want to invest in domestic enterprises through return investment, they can't wait for two years, because it is enough to miss investment opportunities and development opportunities of the companies they invest in.
In view of the way that domestic residents directly set up SPV by injecting the rights and interests of their domestic enterprises, document 106 stipulates that domestic residents must submit a business plan for overseas financing when applying for foreign exchange registration of overseas investment, which should include their "industry, development history and financial situation in the last three years". This actually limits domestic companies to be established for at least three years. Some insiders pointed out that, in fact, many domestic companies were established less than three years ago when they applied to set up SPV overseas, and some enterprises were even set up specifically for overseas financing, especially private enterprises. The provisions of document 106 undoubtedly add obstacles to such enterprises.
In addition, document 106 gives a clearer and stricter definition of the term "domestic resident natural person". For example, Document No.75 further refines the concept of "a natural person who has no legal status in China but habitually lives in China due to economic interests" into "having a permanent residence in China, traveling abroad, studying abroad, and studying abroad". Natural persons who hold the domestic capital rights and interests of domestic enterprises; Holding the original domestic rights and interests of domestic enterprises, although the rights and interests are changed to foreign rights and interests, they are ultimately natural persons held by themselves. "
In fact, it is clear that foreigners must also obtain the foreign exchange registration of SAFE in related investments, which blocks the possibility of evading relevant regulatory operations by using the status of foreigners in China.