Loans for the absorption of foreign investment refer to the local- and foreign-currency loans provided by the Bank to fund domestic projects that are based on foreign investment and comply with relevant policies of China for absorbing foreign investment. They are aimed at absorbing and guiding foreign investment in China, supporting domestic enterprises to utilize both domestic and overseas markets and resources to develop the real economy, introducing the world’s advanced technologies, equipment, and production organization and management models, and enhancing the quality and level of foreign investment absorption and utilization.
All domestic enterprises registered with administrative bureaus for industry and commerce of China and having an independent legal capacity, or overseas enterprises registered legally overseas and having an independent legal capacity can apply to the Bank for loans for the absorption of foreign investment. In the context hereof, the term overseas refers to countries and regions other than the Chinese mainland, including Hong Kong, Macao, and Taiwan.
1. The borrower should have the economic strength and operational management capability required for the proposed investment project. It must also have good financial condition and credit standing, and the ability to repay the loan principal and the interest accrued thereon. In cases where the borrower is an overseas enterprise, the country or region where it is located must have a relatively stable economic and political environment.
2. Relevant investment projects must have good expected economic returns.
3. The borrower must have established a good corporate governance structure and standard internal management mechanism. Its management must have a strong ability for market expansion and innovation awareness. At the same time, it must have a solid ability to repay debts and withstand risks.
4. The borrower shall meet the requirements of the Bank’s credit regulations, internal control, and risk management rules.
5. The proposed investment project shall conform to the detailed planning of the Chinese government on commerce, industry, land, environmental protection, energy saving and emission reduction, resources, overall urban planning, and regional control. It shall also comply with other policies on foreign investment, and credit access requirements and allocation policy of the Bank (if any).
6. Various project-related investment and cooperation formalities should be complete. In addition, relevant projects should have been approved by or filed with relevant government agencies of China, with all necessary approvals in place. At the same time, the approval and consent of relevant authorities of the source country or region of foreign investment are required when necessary.
7. The share of foreign contributions to fixed-asset investment projects shall not be lower than 25% of the capital of such projects. In addition, upon the completion of relevant M&As, the shareholding ratio of foreigners in such M&A projects shall not be lower than 10% of the total share capital.
8. The borrower must have completed foreign exchange registration for domestic direct investment (if any) as required by the State Administration of Foreign Exchange.
9. A repayment guarantee recognized by the Bank should be provided (if necessary).
10. Other conditions as deemed necessary by the Bank shall apply.