China Further Opens to Foreign Banks

China continued to deliver on its promise to further open to the outside world.

The State Council and the China Banking and Insurance Regulatory Commission, recently revised the existing regulations on foreign-funded banks, the Regulations of the People's Republic of China on the Administration of Foreign-funded Banks and its implementation regulations () effective respectively from 30 Sep and 18 Dec 2019, including lowering the entry threshold and expanding business scope.
Business Scope
A wholly foreign-funded bank (WFOE) or a Sino-foreign equity joint venture bank (JV) may engage in all or part of the following foreign currency and RMB businesses:

• accepting public deposits

• offering short-term, mid-term and long-term loans

• accepting and discounting bills

• acting as an agent for issuance, redemption and underwriting of government bonds

• buying and selling treasury bonds, financial bonds and other securities priced in foreign currencies other than shares

• providing letters of credit and guarantees

• processing domestic and overseas settlement

• buying and selling foreign exchange whether on its own or acting as an agent

• insurance agency business and acting as an agent for payments and receipts

• interbank borrowing

• bank card businesses

• providing safe deposit boxes

• providing credit checks and consultancy services related to bank businesses

• and any other business approved by the banking supervision and regulatory authorities of the State Council

Moreover, WFOE or JV may, upon approval by the People's Bank of China, engage in the sale and purchase of foreign currencies.
Minimum Registered Capital
The minimum registered capital of WFOE or JV shall be RMB 1 billion or an equivalent amount in freely convertible currency, which shall be fully paid-in. Where WFOE or JV establishes a branch within the territory of China, it shall make a non-returnable working capital allocation of not less than RMB 200 million or an equivalent amount in freely convertible currency to its branch.

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