Notice 87

At the beginning of the year, the Notice 87 (Notice on Issues Relating to Renminbi Foreign Direct Investment) took effect. It is an initiative from the Ministry of Commerce ("MOFCOM") and the People's Bank of China to vary the legitimate channels for the flow of RMB back into China. One of the main goals is to support the globalization of China's currency.

Notice 87 applies, inter alia, to direct investment in China, including the set-up of a company, capital increases, share participations and mergers and acquisitions. It applies to these operations as long as they are undertaken by foreign companies or individuals, in accordance with Chinese regulations and using RMB lawfully obtained abroad.

Notice 87 removed some of the previous limitations, for example : MOFCOM approval was required where foreign direct investment was valued at RMB300 million or more; involved state-controlled industries or financial guarantees; or was injected into a foreign invested investment company or venture capital company or equity investment company. It is no longer the case.