Money and structure
SAFE and China currency controls
Also called SAFE, State Administration of Foreign Exchange, 国家外汇管理局.
SAFE is China's State Administration of Foreign Exchange, and under its rules each individual has an annual facilitation quota of USD 50,000 equivalent, counted separately for settling foreign exchange into renminbi and for buying it, which may not be used for capital account items such as an overseas investment.
What it decides
The figure is Article 2 of the implementing rules, Huifa [2007] No. 1, which sit under the Regulations on Foreign Exchange Administration, State Council Order No. 532, and the Measures for the Administration of Individual Foreign Exchange, People's Bank of China Order [2006] No. 3. The individual foreign exchange purchase application every buyer signs states that the quota may not be used for buying property abroad, securities investment, life insurance or investment-linked dividend-paying insurance, or other capital account items not yet opened; that the holder may not lend it to help another person buy foreign exchange; and that another person's quota may not be borrowed to split a purchase. Its list of fourteen permitted purposes contains no investment box. A breach puts the individual on the watch list for the year of listing and the two following years with no facilitation quota, plus administrative penalty under the Regulations, referral for money laundering investigation and an entry in the personal credit record. Article 16 instead routes an individual's outbound direct investment through approval by the local SAFE branch and overseas investment foreign exchange registration, and that approval, not the quota, is where these rules point an EB-5 subscription.
Where this is explained properly
Pages here that go into safe and china currency controls rather than mentioning it.
Related terms
- Liberalised Remittance SchemeThe Liberalised Remittance Scheme is the Reserve Bank of India facility under which a resident individual, minors included, may remit up to USD 250,000 abroad in a financial year running April to March for any permitted current or capital account transaction, with any overseas investment made under it governed by the Overseas Investment Rules 2022.
- Form A2 and Forms 15CA and 15CBForm A2 is the application and declaration an Indian resident must furnish to the authorised dealer bank to buy foreign exchange for an outward remittance, while Forms 15CA and 15CB are separate income tax filings for a payment to a non-resident, from which a remittance made by an individual that needs no prior Reserve Bank approval is exempt.
- CapitalCapital is the cash and tangible assets an EB-5 investor contributes to the new commercial enterprise. Two texts define it: the statute, which governs petitions filed on or after 15 March 2022, and the older regulation, whose conditions on debt USCIS still applies alongside the statute.
- Source of fundsSource of funds is the documentary showing that an EB-5 investor's required capital, and the money used to pay administrative costs and fees, was obtained from a lawful source and through lawful means, proved by records rather than by assertion.
- Path of fundsPath of funds is the account by account trail documenting how the capital moved from its proven source into the new commercial enterprise, and it is a separate showing from proving that the source was lawful.
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