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Corporate Service - China

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Q&A Regarding Foreign Debt of Chinese Enterprises (2)

Answer
Q:
Under what circumstances can the debtor deregister the foreign debt registration?
A:
When the outstanding balance of foreign debts is zero and the debtor no longer withdraws, the debtor shall go through the deregistration of foreign debt registration procedures at the foreign exchange bureau in accordance with the regulations.

Q:
Where a non-bank debtor does not handle the receipts and payment of funds through a domestic bank, under what circumstances does it need to go through the filing procedures at the foreign exchange bureau?
A:
For those who do not handle the receipt and payment of funds through domestic banks, the non-bank debtor shall go through the filing procedures at the local foreign exchange bureau with relevant certification materials after the change in the amount of foreign debt withdrawal, principal and interest repayment and outstanding balance.

Q:
Can foreign debt borrowed by non-bank debtors be settled from foreign exchange into RMB?
A:
Foreign debt borrowed by foreign-invested enterprises can be settled into RMB. Unless otherwise stipulated, foreign debt borrowed by domestic financial organizations and China domestic invested enterprises cannot be converted to RMB through foreign exchange settlement.

Q:
What can short-term foreign debt be used for?
A: In principle, short-term foreign debt can only be used as fluid fund and shall not be used for medium or long-term purposes such as fixed asset investment.

Q:
What does domestic loan under foreign guarantee refer to?
A: Qualified debtors borrowing money from domestic financial organizations, they may accept guarantees provided by overseas institutions or individuals.

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