Meaning
Foreign exchange registration for foreign direct investment transactions is governed by STA Public Notice 2013 No 40, an administrative directive issued by the State Administration of Foreign Exchange in China. Regulatory authority over capital account transactions shifts from direct bank verification to delegated financial institutions under this protocol. Compliance failure prevents legitimate profit repatriation and locks inbound capital inside domestic banking channels.
Direct Authority
Implementation of STA Public Notice 2013 No 40 transfers specific verification duties to commercial banks operating within designated free trade zones. Operational supervision remains with local branch bureaus of the State Administration of Foreign Exchange through periodic post-transaction audits. Commercial banks process capital verification requests directly without requiring prior approval from central administrative desks for standard equity contributions.
Capital Verification
Foreign investors submit audited financial reports and official corporate resolutions to satisfy documentary prerequisites during equity injection procedures. Verification examines the exact source of offshore funds to prevent illicit capital flight disguised as foreign direct investment. Discrepancies between declared capital schedules and actual bank receipts trigger immediate suspension of foreign exchange settlement privileges.
Remittance Control
Outbound dividend payments depend entirely upon complete tax clearance certificates matching registered capital records held by designated banks. Foreign enterprises present annual audit reports demonstrating retained earnings before commercial institutions release foreign currency across international borders. Unregistered shareholder loans remain ineligible for foreign exchange conversion regardless of internal corporate agreements.
