New steps adopted in support of “going out”

In order to provide trade facilitation both for domestic firms developing worldwide and for overseas investors based on loan support, the State Administration of Foreign Exchange recently issued the Circulation concerning the guarantee exerted for external business, in which it states:  First, it has been extended the terms for the guaranteed entities, with widened scope of insurance business.

 In other word, the guaranteed entities by no means have to rely on the status of its ownership structure and net assets proportion involving with domestic firms, if they are financed by the banks. 

Second, it has been relaxed by the limitation of financial indicator and by the lowered earning rate. That is, the ratio between net asset and total asset is required not below 15 percent, in which net asset should be positive with at least one annual profit in three years running.

Third, regulations have been adjusted for the examination and management on the balance quota of guaranty, which is demanded not higher than 50 percent of its paid-in capital, or working capital.

Fourth, the management method has been clarified that at least one partner out of the beneficiaries should be domestic entity or overseas entity, but the latter should be owned or indirectly owned by domestic shares. Fifth, it has been abandoned the performance check on contracted guaranty, and has been made clear the procedures bounded with other guarantors.