On 15 December 2023 the State Administration of Foreign Exchange published the Notice on Expanding the Pilot for High-Level Opening of Cross-Border Trade and Investment (Hui Fa [2023] No. 30). The notice was issued on 4 December and expands the pilot to the entire territories of Shanghai, Jiangsu, Guangdong including Shenzhen, Beijing, Zhejiang including Ningbo, and Hainan.
For companies registered or operating in the pilot areas, access to facilitation measures for cross-border settlement, trade receipts and payments and capital-account transactions improves. Facilitation is not deregulation: authenticity, compliance and anti-money-laundering requirements remain.
What the pilot expands
The notice expands high-level opening policies in both current-account and capital-account areas. Common measures include facilitating current-account foreign-exchange receipts and payments, supporting offshore trade, optimising settlement for new forms of international trade and expanding facilitation for capital-account income payments.
Specific conditions and procedures are usually issued by local SAFE branches. Companies should look beyond the notice to local implementing rules and bank requirements.
Practical impact
First, settlement efficiency. Authenticity review methods may be optimised, and the manner and frequency of document submission may change. For recurrent, low-risk trade, settlement may speed up.
Second, offshore trade. Pilots generally support genuine, compliant offshore trade, but banks will examine transaction background, goods flow and fund flow more closely. Companies should retain contracts, invoices, transport documents and business descriptions.
Third, capital account. Facilitation for foreign direct investment, foreign debt and outbound loans may improve, while registration, use of funds and repayment arrangements must remain compliant.
Documents to prepare
First, entity and qualifications: business licence, foreign-trade operator registration, customs registration and foreign-exchange registration.
Second, transaction authenticity: contracts, invoices, orders, logistics documents, customs declarations and payment records.
Third, business description: for offshore and entrepot trade, a description of the business model and upstream-downstream relationships.
Fourth, compliance systems: AML, sanctions screening, trade-background review and unusual-transaction monitoring.
Three common misunderstandings
First, treating the pilot as “no review”. Facilitation optimises review methods; it does not remove review.
Second, treating offshore trade as free movement of funds. Offshore trade requires genuine transaction background, and fund flow should correspond to goods flow.
Third, ignoring tax and customs. Foreign-exchange facilitation does not change tax filing, customs supervision or rules of origin.
For cross-border structuring and foreign exchange, see our multi-jurisdiction service; for offshore tax and transfer pricing, see overseas tax; for offshore company incorporation, see offshore structure.
This article is based on the Notice on Expanding the Pilot for High-Level Opening of Cross-Border Trade and Investment published by SAFE on 15 December 2023. It is for reference only and does not constitute legal advice.