Regulations for Foreign Financial Institutions

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Last updated at: (Beijing Time) Monday, December 02, 2002

Regulations for Foreign Financial Institutions

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The regulations on the administration of foreign financial institutions, which was issued by the State Council and took effect on February 1, 2002, governs the criteria and procedures for the establishment of foreign financial institutions in China.

According to the regulations, foreign financial institutions include wholly foreign-owned banks, joint venture banks, branches of foreign banks, wholly foreign-owned financial companies and joint venture financial companies.

To set up a foreign financial institution, the foreign investor must be a financial institution and its total asset at the end of the previous year, before applying to set up such foreign financial institution, must be no less than US$10 billion for wholly foreign-owned or joint venture operations and US$20 billion for foreign bank branches. The regulations also outline a detailed matrix defining services, venture type, and entity with corresponding minimum investment levels of 100 million yuan (US$12 million) for foreign bank branches, 200 million yuan (US$24 million) for wholly foreign-owned or joint venture financial companies and 300 million yuan (US$36.24 million) for wholly foreign-owned or joint venture banks, which shall be paid in freely convertible currencies.

When applying to set up a foreign financial institution, the applicant must submit the following documents to the People's Bank of China: An application letter; articles of association of the proposed financial institution; a feasibility study report and annual reports by the applicant for the past three years.

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