China - Recent Developments In Cross-Border Investment Channels.

Legal News & Analysis - Asia Pacific - China - Regulatory & Compliance

19 August 2021

On 5 July 2021, the Chongqing government released with immediate effect the Interim Measures for the Pilot Program of Outbound Investment by Qualified Domestic Limited Partners (QDLP) of Chongqing Municipality (available here in Chinese). According to an announcement by the Chongqing Local Financial Supervision and Administration Bureau in January this year, the Chongqing government obtained approval for the launch of the QDLP regime with a quota of US$5 billion, being the first city in central and western China to implement the QDLP regime.

Earlier this yearin April, authorities in the southern island of Hainan issued the Interim Measures for the Pilot Project of Overseas Investment by QDLP in Hainan Province (available here in Chinese),introducing the QDLP regime into Hainan with a quota of US$5 billion. This further advanced China’s efforts to establish Hainan as a tax-free trading centre, a free-trade port and an international financial hub, following the Opinions on Financial Support for Hainan’s Comprehensive Deepening of Reform and Opening Up (available here in Chinese) which was issued by China’s top financial authorities in the same month. According to the list of first batch of QDLPs published by Hainan Provincial Financial Regulatory Bureau, 24 companies have been granted QDLP licences in August 2021.

The QDLP regime allows foreign asset managers to raise funds from mainland Chinese investors and invest into overseas markets. It is worth noting that compared to the QDLP regimes in other cities such as Beijing and Shanghai, the QDLP regimes in Chongqing and Hainan have more relaxed eligibility requirements, wider permitted investment scopes and more flexible quota management.

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Taylor Hui, Partner, Deacons