On 9 February 2023, the National Development and Reform Commission of the People’s Republic of China (the NDRC) published the frequently answered questions (the FAQs) on the guidelines for the examination and registration of medium- and long-term foreign debts owed by enterprises. Shortened from 75 to 65 answers, the FAQs explores and sheds light on several important provisions in the Administrative Measures for the Examination and Registration of Medium- and Long-term Foreign Debts of Enterprises (the Administrative Measures), which came into effect on 10 February 2023.
The FAQs clarify that an application for examination and registration must be submitted in advance to the NDRC in the following circumstances:
- Where a domestic Chinese enterprise (and any overseas subsidiary or branch under its control) borrows an offshore debt instrument that is denominated in the local currency or a foreign currency and has a term of more than one year for repayment of principal and interest, as agreed.
- Where a domestic enterprise (and any overseas enterprise or branch under its control) borrows a debt with a term of more than one year from a foreign enterprise (including an overseas shareholder or overseas subsidiary).
- Where a domestic enterprise (and any overseas enterprise or branch under its control) plans to borrow a revolving loan from a foreign bank with a term of less than one year and credit period of more than one year.
- Where a domestic financial institution transfers a non-performing loan to a foreign jurisdiction.