What is the process for handling foreign exchange payments for foreign mergers and acquisitions
According to the current effective Huifa [2013] No. 21 document needs to be completed according to the following steps and requirements:
1. Basic information registration of foreign-invested enterprises
After completing the equity transfer change registration, the target company should go to the Administration of Foreign Exchange with the approval certificate and business license to handle the "Basic Information Registration for Foreign Investors' Acquisition of Domestic Enterprises and Foreign-Invested Enterprises". After this registration is completed, the foreign exchange quota control of "equity transfer inflow" will be formed in the linkage system between the State Administration of Foreign Exchange and the bank.
2. Opening of domestic asset realization account
The target company has completed the basic information registration of the enterprise Afterwards, domestic sellers (including enterprises and individuals) can open a "domestic asset realization account" in any bank to collect the transfer price paid by the buyer (foreign investor). For the same equity transfer, the seller can only open one domestic asset realization account.
3. Foreign investors pay the merger and acquisition price
After the domestic asset realization account is opened, Foreign investors can pay the money to the domestic asset realization account in accordance with the agreement between the parties to the transaction. The amount paid by the buyer shall not exceed the foreign exchange quota control of "equity transfer inflow" in the SAFE system, and the excess cannot be recorded in the account.
4. Confirmation and registration of investment in acquisition of Chinese equity by foreign investors
The buyer's price is paid within the country After the assets are realized in the account, the target company should apply to the Administration of Foreign Exchange for "Confirmation of Capital Contribution for the Acquisition of Chinese Equity by Foreign Investors."
In the case of payment in foreign exchange (including cross-border RMB), the foreign exchange administration system will automatically generate an investment confirmation certificatebright. In the case of payment of consideration for non-monetary assets, relevant payment certificates are required: if the payment is for imported equipment, a customs declaration form or filing list must be provided; if the payment is made with intangible assets, an asset evaluation report and other documents must be provided.
According to the current foreign exchange management regulations, the consequences of failing to confirm the investment are twofold: on the one hand, the seller cannot handle the foreign exchange settlement of the merger and acquisition price; on the other hand, Foreign investors will not be able to remit foreign currency when they need to remit foreign currency due to profit distribution, equity transfer, liquidation and dissolution of the target company in the future. This provision actually protects the rights and interests of domestic sellers and can urge foreign investors to pay the transfer price as agreed in order to obtain complete equity rights.
5. Foreign exchange settlement
After the target company obtains the above investment confirmation registration certificate, the seller can rely on This certificate continues to process foreign exchange settlement. There are different exchange settlement requirements depending on whether the seller is a natural person or an enterprise.
When the seller is an individual and there are gains from equity transfer, foreign exchange needs to be settled in two installments. For the first settlement of foreign exchange, only the amount of personal income tax payable by the seller based on the equity transfer can be settled. After obtaining the tax payment certificate, you can apply to settle other foreign exchange in the account; if there is no equity transfer income, you can settle the foreign exchange in one go.
When the seller is an enterprise, no matter whether there is any gain from equity transfer, there is no need to pay tax before settlement of exchange. However, the seller must settle foreign exchange in accordance with the foreign exchange settlement requirements of the "capital account" and provide documentation proving the use of the foreign exchange settlement funds and invoice vouchers for the previous foreign exchange settlement funds. Foreign exchange settlements below 50,000 US dollars are exempted from providing such documents. At the same time, foreign exchange settlement funds may not be used to issue loans, repay inter-enterprise loans, domestic equity investments (except for foreign-invested companies and foreign venture capital enterprises), and securities investments.
The above knowledge is the editor's answer to the question "What is the foreign exchange processing process for foreign M&A price?" The foreign exchange processing process for foreign M&A price includes the basic procedures for foreign-invested enterprises. Information registration, opening of domestic asset realization account, etc. If readers need legal help, they are welcome to go to the Legal Savior Network for legal consultation.
