New Foreign Exchange Circular Relaxes Capital Control Rules

October 28, 2005

Sonnenschein's Asia Pacific Practice has prepared the attached e-Alert on recent developments in China's foreign exchange control regime and specifically on the capital control rules as communicated by the PRC State Administration of Foreign Exchange ("SAFE") which promulgated a new circular concerning relevant issues in the administration of foreign exchange regarding financing and round-trip investment by domestic residents through offshore special purpose companies. These recent developments will have a dramatic impact on venture capital and private equity investment, foreign trade and the flow of foreign capital into China going forward. We feel these significant policy shifts would directly affect those doing business in China.

For more information on the topics covered by the e-Alert, please contact: Yabo Lin at (816) 460-2553, ylin@sonnenchein.com; James Hsu at (213) 892-2934, jhsu@sonnenschein.com; and Chunlin Leonhard at (312) 876-8090, cleonhard@sonnenschein.com.

Click here to read the E-Alert.

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