In order to facilitate Qianhai small and micro sized Hong Kong-funded enterprises to obtain overseas loans, the Shenzhen Branch of the State Administration of Foreign Exchange of the PRC officially released the Operation Guidelines for Qianhai Hong Kong Funded Enterprise Loan Business on its website on 14 August 2023.
The Business of Qianhai Hong Kong Funded Enterprise Loan means that eligible Hong Kong funded small and micro sized enterprises registered in the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone (hereinafter referred to as Qianhai Cooperation Zone) are allowed to borrow foreign debts with a cap of RMB5 million. The creditors of foreign debts shall be limited to overseas banks and the withdrawal currency shall be limited to RMB.
Enterprises participating in Qianhai Hong Kong Funded Enterprise Loan Business shall meet the following conditions:
Hong Kong funded small and micro sized enterprises registered in Shenzhen Qianhai Cooperation Zone and established for at least half a year.
There have been no records of foreign exchange administrative penalties in the past two years. (For those established for less than two years, there have been no records of foreign exchange administrative penalties since the date of establishment.)
Real estate enterprises and quasi-financial enterprises (including financing guarantee companies, small loan companies, pawnshops, financing leasing companies, commercial factoring companies, local asset management companies, etc.) are excluded.
The launch of Qianhai Hong Kong Funded Enterprise Loan Business greatly facilitates Qianhai small and micro sized Hong Kong funded enterprises that are not qualified for borrowing foreign debts due to insufficient net assets to obtain loans from overseas banks, which helps to alleviate the financial pressure on the enterprises.
It should be bear in mind that the usage of foreign debts are subject to the following restrictions:
It shall not be used directly or indirectly beyond the business scope of the enterprise or for expenditures prohibited by laws and regulations.
It shall not be used for the construction or purchase of non-self-use real estate.
It shall not be directly or indirectly used for securities investment or other financial investments.
It shall not be used for domestic equity investment.
It is not allowed to lend to other enterprises.
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