The State Administration of Foreign Exchange (SAFE) published a draft notice
seeking comments on measures to further ease cross-border investment and
financing. The draft permits domestic institutions to remit funds abroad as
overseas-investment standby funds for small, routine operating expenses of
overseas investees (rent, utilities, staff costs, office, transport, taxes,
petty procurement). Banks may process remittances on presentation of a
commitment letter specifying offshore use. Remittances are limited to the
equivalent of $200,000 per month and cumulatively may not exceed 10% of the
domestic institution’s registered outbound direct investment (ODI) remittance
quota. Misuse of standby funds will be investigated and dealt with according to
law.
