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Lin-gang's first cross-border capital pool begins operating

en.lgxc.gov.cn| Updated: May 14, 2020 L M S

Lin-gang Special Area in the China (Shanghai) Pilot Free Trade Zone issued its first fully functioning cross-border capital pool, as multinational companies need to allocate and adjust their reserves of renminbi and foreign currencies among their domestic and overseas subsidiaries.

Shanghai Milkyway Chemical Logistics Ltd Co was able to successfully realize the capital entry of overseas group members thanks to the cross-border capital pool built by the Shanghai Pudong Development Bank on May 12.

According to several measures implemented on May 8 by Lin-gang Special Area, the Shanghai Head Office of the People's Bank of China, the Shanghai Bureau of the China Insurance Regulatory Commission, the Shanghai Bureau of the China Security Regulation Committee, and the Shanghai Municipal Financial Regulatory Bureau, cross-border capital pool businesses integrating renminbi and foreign currency services will be explored in Lin-gang.

The fully functioning cross-border capital pool integrates renminbi and foreign currencies in free trade accounts (FTN), is capable of converting funds in the accounts, and is able to conveniently receive and pay cross-border funds.

Multinational enterprise groups can build a capital pool to allow for the cross-border allocation of renminbi and foreign currencies, and can flexibly choose between different types of currency, which greatly increases freedom in the use of capital.

The convenience of the cross-border capital pool is on par with world-class Cash Pool services.

In addition, foreign enterprises can also become host enterprises of the capital pool by opening foreign institution FNTs, providing more options for multinational business groups, and making use of more functions of the international financial and asset management center to be introduced in Lin-gang.  

"With this pool of capital, we will be able to facilitate efficient cross-border capital flows at both the trade and investment levels," said Miao Leimin, Chief Financial Officer of Shanghai Milkyway Chemical Logistics Ltd Co.

As per the Shanghai branch of the State Administration of Foreign Exchange, the cross-border capital pool will help market entities make better use of the domestic and overseas markets, reduce financing costs, and allow for more efficient use of capital.


An aerial view of the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone in Shanghai. [Photo by Gao Erqiang/China Daily]


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