The National Development and Reform Commission, the Ministry of Commerce, the People’s Bank of China and two other administrations have co-released a document to regulate private enterprises’ overseas investment, China News Service reported.
The new rules ordered private companies to avoid activities such as illegally acquiring foreign currency, transferring assets or money laundering in the name of foreign investment. They are also encouraged to apply for approval and make a record before parking their money overseas.
It also requires private companies to step up supervision of their overseas branches with regard to such aspects as fund or equity transfer, financing, reinvestment and guarantees.
Meanwhile, for private firms who plan to use Chinese financial institutions’ credit insurance, they should never make any overseas financing commitment without obtaining a letter of undertaking issued by related financial institutions.