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Why do Chinese companies need to file investment records when investing overseas?

Released Date: Mar 10,2022 Article Source: HUANZE

Due to the foreign exchange control in China, the investment funds of Chinese enterprises in setting up subsidiaries abroad can be transferred out of China through normal channels of foreign exchange purchase only after they have been put on record. After the profits of the overseas subsidiaries, they can also be paid back to the domestic parent company in the form of dividends.

Due to the foreign exchange control in China, the investment funds of Chinese enterprises in setting up subsidiaries abroad can be transferred out of China through normal channels of foreign exchange purchase only after they have been put on record. After the profits of the overseas subsidiaries, they can also be paid back to the domestic parent company in the form of dividends.

Individual foreign investment cannot be put on record at present, because the state does not allow individual foreign investment. They need to file with the provincial Department of Commerce and the Provincial Development and Reform Commission respectively. For example, some sensitive industries cannot be successfully registered, such as the research and development, production and maintenance of weapons and equipment, cross-border water resources development and utilization, real estate, hotels, entertainment, film and television industry, football clubs, etc., especially the equity investment funds or investment platforms established overseas without specific industrial projects.

For the record keeping of the company, the background introduction of the investment project, the content and scale of the investment project, the specific business model and the expected income shall be provided; A detailed description of the amount invested and the use of the funds.

Why do Chinese companies need to file investment records when investing overseas?

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