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March 1, 2017

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Foreign-invested firms can send profits abroad

PROFITS of foreign-invested companies in China can be repatriated overseas normally even as authorities have beefed up efforts to monitor capital flows, the Chinese central bank reassured the market yesterday.

Genuine and legal international payments and transfers out of China are not restricted as convertibility is already allowed under the current account, the People’s Bank of China said in a statement.

International payment and transfers of dividend, trade of goods and services can be made at commercial banks with proper documents, the statement said.

The central bank also included e-mail addresses in the statement to help foreign-invested companies report problems they encountered when they transfer profits overseas.

The PBOC statement was issued after various posts on social media platforms alleged that foreign-invested companies were not allowed to transfer their profits overseas.

A month ago, the State Administration of Foreign Exchange, the country’s forex regulator, released new rules to enhance inspection on the authenticity and compliance of foreign exchange operations.

SAFE allowed companies to use foreign currencies borrowed from overseas to be used domestically, while banks and companies were urged to strictly follow regulations when handling cross-border money movements.

SAFE said after the release of the new rules that curbs have not been placed on foreign-invested companies transferring profits overseas.


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