With the continuous release of cross-border financing policy dividends, the pilot business of foreign debt facilitation is booming. A reporter from the Shanghai Securities News learned that the Shanghai Branch of the State Administration of Foreign Exchange continued to promote the pilot work of foreign debt facilitation for high-tech enterprises.
The pilot program of foreign debt facilitation not only strongly supports Shanghai high-tech enterprises to make better use of both domestic and foreign markets and resources, but also accelerates the pace of their high-quality innovation and development. The reporter learned that responding to the cross-border financing market demand put forward by high-tech enterprises is the driving force and direction for the Shanghai Branch of the State Administration of Foreign Exchange to further deepen and thoroughly open up the capital account at a high level. In the next step, we will explore the high-tech park model, case model and linkage model for cross-border financing facilitation.
Cross-border financing policy dividends continue to be released
In recent years, the Shanghai Branch of the State Administration of Foreign Exchange has continued to promote the pilot work of foreign debt facilitation for high-tech enterprises. While increasing the amount of facilitation, it has increased the pilot targets of “specialized, specialized, and new” enterprises, and expanded the policy benefit to the whole city.
In April 2020, the Shanghai Branch of the State Administration of Foreign Exchange issued and implemented the “Notice on the Pilot Business of Foreign Debt Facilitation Quotas for High-tech Enterprises in China (Shanghai) Pilot Free Trade Zone”, which supports and encourages registration in the Free Trade Zone. Innovative enterprises with independent intellectual property rights, advanced technologies and processes, good market prospects, small net assets, and full-caliber cross-border financing risk-weighted balances less than the equivalent of US$5 million. Self-borrowing foreign debts within the approved quota.
The dividends of the more convenient cross-border financing policy continued to be released. On May 31, 2022, the State Administration of Foreign Exchange issued a notice to support qualified high-tech and “specialized, specialized, and new” enterprises to carry out the pilot program of foreign debt facilitation quotas. This pilot project of cross-border financing facilitation for high-tech and “specialized, specialized, and new” enterprises has achieved “capacity expansion” and “increase in amount”: the number of pilot areas has increased to 17, covering 80% of the country’s high-tech and “specialized, specialized, and new” enterprises. “Enterprise; the facilitation quota in the previous nine pilot areas was increased to the equivalent of US$10 million.
“The pilot of the foreign debt facilitation quota combined with the facilitation reform of foreign exchange income payment under the capital account is a preferential policy measure that high-tech enterprises can actually enjoy.” The Shanghai branch of the State Administration of Foreign Exchange said that at present, Shanghai enterprises have obtained high-tech enterprises. Certification, you can enjoy the national tax incentives and exemption policies lower than the ordinary corporate tax rate, you can also directly get a considerable amount of local incentives, and at the same time, it is helpful to undertake major industrial restructuring and independent innovation projects.
Provide “customized” services for different needs
Considering the existing pilot business of foreign debt facilitation quotas, the corresponding business models also reflect the characteristics of “customization” for different cross-border financing needs.
Kyligence Group has opened a number of branches or offices at home and abroad. The two high-tech enterprises of Shanghai KZ Information Technology and KY Information Technology are branches established by Kyligence Group in Shanghai Free Trade Pilot Zone and Hongkou District respectively. Since Kyligence Group’s overseas funds are surplus all the year round, and KZ and KY companies also have bank credit lines in China, in order to improve the comprehensive utilization efficiency and efficiency of the group’s domestic and foreign funds, Kyligence Group has always wanted to use more convenient and preferential methods and The channel transfers overseas funds back to China for use, and for this purpose, a cross-border two-way RMB fund pool has also been established.
However, KZ and KY companies are limited by their business models. Whether they adopt full-caliber cross-border financing macro-prudential management, “betting poor” management or cross-border capital pool management models, they cannot meet the normal requirements of cross-border financing from the group. need. Ping An Bank Shanghai Branch and Pudong Development Bank Shanghai Branch are KZ and KY companies respectively. They have designed a pilot program for the maximum foreign debt facilitation quota of US$5 million with flexible capital use time and term and different repayment methods according to local conditions. The purpose of comprehensive use of domestic and foreign funds.
This is an example of a series of foreign debt facilitation pilot businesses in recent years that are “tailor-made” for the needs of enterprises.
At present, the Shanghai Science and Technology Innovation Center is in a critical period of growth. The comprehensive scientific and technological progress level index ranks first in the country for four consecutive years, and the number of high-tech enterprises per 10,000 corporate legal persons ranks first in the country. At the same time, Shanghai is also constantly improving the classification, stratification and grading of the SME gradient cultivation system and plan. How to accurately implement policies to help high-tech enterprises continue to innovate and grow is the key to achieving this goal with high quality and ultimately building the Shanghai Science and Technology Center.
Explore new modes of cross-border financing facilitation
More and more high-tech enterprises are expected to experience greater and deeper facilitation in cross-border financing. The reporter learned that responding to the cross-border financing market demand put forward by high-tech enterprises has become the driving force and orientation for the Shanghai Branch of the State Administration of Foreign Exchange to further deepen and thoroughly open up the capital account at a high level. Exploring the high-tech park model, case model and linkage model for cross-border financing facilitation will be the future direction of Shanghai’s cross-border financing facilitation policy.
The Shanghai branch of the State Administration of Foreign Exchange said that in the next step, it is necessary to explore the integrated capital pool model of domestic and foreign currencies compared with multinational companies, and use the high-tech park as the central unit for cross-border capital collection and decomposition to provide reasonable calculation quotas for the core member enterprises of the park. Policy measures to facilitate cross-border investment and financing.
In terms of case-by-case mode, for enterprises that really need to exceed the upper limit of the facilitation quota, but have good development prospects and belong to the key state-supported industries or fields to apply for the pilot program, it may be explored to handle foreign debt contract registration on a case-by-case basis, and specify the actual financing needs in the foreign debt contract. , and the working mode of collective deliberation and decision-making by branches of foreign exchange bureaus to improve the operability and pertinence of cross-border financing facilitation policies and measures.
In addition, when banking institutions provide foreign debt facilitation quota services, they need to combine the comprehensive capital needs of the enterprise at different development stages in its entire life cycle, and work with relevant financial institutions to build equity, debt, loan and other investments linked to the enterprise’s cross-border financing facilitation policy. The financing business product system is also a necessary measure to effectively prevent the cross-border financing risks of pilot enterprises.Return to Sohu, see more
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