The State Administration of Foreign Exchange (SAFE) has announced the expansion of trials to facilitate cross-border financing for leading tech companies to 8 new provinces and cities.
SAFE recently issued the “Notice Concerning Trials to Increase the Convenience of Cross-border Financing Undertaken by Tech and Elite Enterprises” (关于支持高新技术和“专精特新”企业开展跨境融资便利化试点的通知).
SAFE said that it would further expand the trials, and that it would “make it convenient for more tech enterprises to independently borrow from abroad within a set quota, helping enterprises to accelerate innovative development.”
In March 2018 SAFE launched trials to increase the convenience of overseas borrowing in the National Independent Innovation Demonstration Zone in Beijing’s Zhongguancun area. The trial permitted micro, small and medium-sized tech enterprise to borrow from abroad within set quotas, yet without being subject to restrictions on the basis of modest net asset size.
SAFE subsequently expanded the trials to nine other provinces and cities, including Shanghai’s free trade pilot zone, the free trade pilot zone in the Hubei province capital of Wuhan, Guangdong province and Shenzhen in the Greater Bay Area, as well as the free trade port of Hainan province.
The new Notice will increase the number of areas participating in the trials to 17 from nine at present, as well as expand the types of market entities that are eligible to participate in the trials.
The Notice will also increase the quotas for the trials of the nine provinces and cities that are currently participating in the scheme to the equivalent of USD$10 million.
SAFE said that the trials seek to reduce the financing costs of enterprises, increase research and development investment, and encourage technological progress.
