Shanghai optimizes cash-pooling service for multinationals

The Shanghai Branch of the State Administration of Foreign Exchange recently released new regulations on piloting a cash-pool service that integrates domestic and foreign currency management for multinational corporations in Shanghai.

This initiative is part of China's broader efforts to balance economic growth with financial security, advance key capital account reforms, and support high-quality development in the real economy.

The upgraded cash-pooling policy, now in its 3.0 version, will allow multinational corporations to better manage cross-border capital flows and improve operational efficiency.

Specifically, the companies will have the capacity to directly handle relevant transactions based on payment instructions within their external debt and overseas lending quotas.
Eligible enterprises can process centralized receipts and payments, on behalf of their overseas subsidiaries, with their domestic subsidiaries or other overseas entities.
External debt and overseas lending quotas can be centrally managed to some extent, while subsidiaries can retain appropriate financial autonomy.
To reduce financing costs, cross-currency lending for current account cross-border payments is permitted among domestic subsidiaries.
Moreover, the filing process will be further streamlined. Procedures like capital account changing that do not involve external debt or overseas lending quotas, and corporate name changing can be processed at partner banks delegated with the authority.
Source:Intl Services Shanghai