(Promulgated by the State Council on April 2, 1985) Article 1. These Regulations are formulated with a view to expanding international economic and financial cooperation so as to be conducive Article 2. In these Regulations, “foreign banks” means the branches set up in the special economic zones by banks the head offices of which In these Regulations, “joint Chinese-foreign banks” means banks operated in the special economic zones by banks or financial institutions Article 3. Foreign and joint Chinese-foreign banks shall abide by the laws and regulations of the People’s Republic of China; their legitimate Article 4. For the establishment of a foreign or joint Chinese-foreign bank in a special economic zone, an application shall be filed with The branches of the People’s Bank of China in the special economic zones shall exercise control and supervision over foreign and joint The State Administration of Exchange Control issues licences for foreign exchange operations to foreign and joint Chinese-foreign Article 5. An application for the establishment of a foreign and joint Chinese-foreign bank shall be made in accordance with the following (I) A bank with foreign capital that wishes to set up a branch in a special economic zone shall file an application through its head 1. A written application signed by the chairman or general manager of the bank with the authorisation of its board of directors and 2. Articles of association, a list of the members of the board of directors, and the balance sheets, profit and loss statements and 3. A copy of the business licence issued by the competent authorities of the county or region where the bank is located; and 4. A written guarantee from its head office committing itself to be responsible for taxes and liabilities. (II) An application for the establishment of the head office of a foreign bank in a special economic zone shall be filed by the foreign 1. A written application for the establishment of a foreign bank which shall include the name of the head office to be set up, registered 2. Articles of association; 3. A list of the chairman, vice-chairmen and members of the board of directors nominated by the investors; and 4. A statement of the investors’ assets and liabilities, along with the certification of a notary public. (III) An application for the establishment of a joint Chinese-foreign bank in a special economic zone shall be filed jointly by the 1. A written application for the establishment of the joint bank, including the name of the joint bank to be set up, the names of 2. A feasibility report jointly prepared by the joint parties; 3. The drafts of the agreement, contract and articles of association relating to the joint parties; and 4. A list of the chairman, vice-chairmen and members of the board of directors of the joint bank nominated by the joint parties. (IV) Foreign and joint Chinese-foreign banks in a special economic zone that intend to set up additional branches within the same A Chinese version shall be attached where the documents and data indicated in section (I) of this Article are in a foreign language. Article 6. Based on an application submitted, the People’s Bank of China may grant its approval to foreign and joint Chinese-foreign banks 1. Granting loans in local and foreign currencies and discounting bills; 2. Inward remittances from foreign countries and the Xianggang (Hong Kong) and Aomen (Macao) regions, and foreign exchange collections; 3. Settlement of export transactions and outward documentary bills; 4. Exchange in foreign currencies and foreign currency bills; 5. Local and foreign currency investments; 6. Local and foreign currency guarantees; 7. Buying and selling of stocks and securities; 8. Trust, safe deposit box, credit investigation and consultation services; 9. Outward remittances by overseas Chinese enterprises, foreign enterprises, Chinese-foreign joint ventures and Chinese-foreign cooperative 10. Local and foreign currency deposits and overdrafts by overseas Chinese enterprises, foreign enterprises, Chinese-foreign joint 11. Handling foreign exchange deposits and loans in foreign countries and the Xianggang (Hong Kong) and Aomen (Macao) regions; and 12. Other business operations. Article 7. A foreign bank head office or a joint Chinese-foreign bank in a special economic zone shall have a registered capital in foreign The paid-in capital or the operating funds of a foreign or joint Chinese-foreign bank shall be fully in hand within 30 days from the Article 8. A foreign or joint Chinese-foreign bank shall, within 30 days from the date of its being approved, register with the Administration Where a foreign or joint Chinese-foreign bank fails to open business within twelve months after the date of its being approved, the Article 9. The loans granted by a foreign bank head office or a joint Chinese-foreign bank in a special economic zone to any enterprise in Article 10. The exchange and settlement between the local currency and foreign currencies by a foreign and joint Chinese-foreign bank shall The interest rates applied by a foreign and joint Chinese-foreign bank to local or foreign currency deposits, loans, overdrafts and Article 11. A foreign or joint Chinese-foreign bank accepting local or foreign currency deposits within a special economic zone shall keep on Article 12. A foreign or joint Chinese-foreign bank shall submit to the branch of the People’s Bank of China in the special economic zone concerned (1) A balance sheet as at the end of the previous month, to be submitted before the tenth of each month; (2) An analytical statement of deposit and loans, an analytical statement of outward and inward remittances and settlement of import (3) The balance sheet, profit and loss statement, and statement of the balances of accounting items for the previous year, along with Article 13. The branches of the People’s Bank of China in the special economic zones shall have the right to examine the business and financial Article 14. The profit that a branch of a foreign bank makes after paying taxes in accordance with the law may be remitted abroad. For the profit that a foreign bank head office or a joint Chinese-foreign bank in a special economic zone makes after deduction for The foreign staff and workers and the Hong Kong and Macao staff and workers of a foreign and joint Chinese-foreign bank may remit Article 15. A foreign or joint Chinese-foreign bank that intends to terminate its business operations shall submit a written report for approval A foreign or joint Chinese-foreign bank that winds up business in accordance with the law shall be liquidated under the supervision After liquidation, the foreign or joint Chinese-foreign bank mentioned in the previous section shall approach the department that Article 16. The branches of the People’s Bank of China in the special economic zones are empowered to issue a warning or impose a fine on any In particularly serious cases, the foreign or joint Chinese-foreign bank may be ordered to stop its business operations or even to Article 17. These Regulations shall also apply to banks or financial institutions with overseas Chinese capital, Xianggang (Hong Kong) capital Article 18. The People’s Bank of China shall be responsible for the interpretation of these Regulations. Article 19. The implementation of these Regulations shall commence on the date of their promulgation.
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