Newsletter
REGULATIONS ON GROUP FI-NANCE COMPANIES
The China Banking Regulatory Commission (CBRC) recently promulgated the Regulations on Enterprise Group Finance Companies, which make specific provisions regarding the condi-tions for an enterprise group to set up a finance company to service its group members, to set up a branch of such a company, or to amend the company's registration, as well as provisions on the scope of such finance companies' business, and their supervision and regulation.
The minimum registered capital required to es-tablish a group finance company is reduced from the previous RMB300 million to RMB100 mil-lion, or the equivalent in a convertible currency. If such a finance company is to conduct foreign exchange business, its registered capital must include the equivalent of at least US$5 million in convertible currencies. In accordance with its business needs, and with the approval of the regulatory authority, a group finance company may apply to establish a branch or a representa-tive office in a region where group members are concentrated and have a relatively high volume of business. But a representative office may not conduct business.
The Regulations' provisions applicable to parent companies and to group members also apply to foreign-invested investment companies and their invested enterprises, respectively. When setting up a foreign-invested finance company, the Cer-tificates of Approval for Establishment of En-terprises with Foreign Investment of the for-eign-invested investment company and its in-vested enterprises must be submitted to the CBRC.