Compared with the previous notice, coded as Hui Fa  No. 75, which governs special purpose vehicles (SPVs), Hui Fa  Notice No. 37 (Notice of the State Administration of Foreign Exchange on Issues Regarding Foreign Exchange Control on Offshore Investment and Financing as well as Round-trip Investment by Domestic Residents Through Special Purpose Vehicles) is significantly different in the way that it clearly supports the “go global” strategy, streamlines and facilitates forex registration, and improves convertibility between cross-border capital and financial transactions.
Notice No. 75 placed its main emphasis on helping companies carry out overseas equity financing. The promulgation of Notice No. 37 indicates the accelerating liberalisation of capital accounts and the gradual relaxation of forex control.
Forex registration of equity incentives of unlisted SPVs. Under the framework of Notice No. 75 and Hui Fa  Notice No. 7, forex registration of the shares of a non-listed company acquired pursuant to an employee stock ownership plan (ESOP), whether by means of the exercise of an option or the realisation of restricted stocks/units (RSs or RSUs), is not governed. Notice No. 75 applies only to so-called replacement of overseas shares with domestic equity by founding shareholders, while Notice No. 7 applies only to the ESOP of a listed company.
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