How Does Foreign Capital Set Up A Financial Institution? Detailed Guidance On 67 Management Measures In Guangdong Free Trade Area

This year, the Guangdong FTA pilot area is 4 years old, and the pace of innovation is getting bigger and bigger.

On April 25th, sponsored by the southern financial and economic media group and the 4th anniversary conference of Guangdong free trade pilot area, which was hosted by the China free trade zone information port, the guidelines on opening up the financial services industry in China (Guangdong) free trade pilot area (2019 Edition) were first published.

How to set up a financial institution in the Guangdong free trade pilot area? With the guidance of foreign investment, foreign capital can find the right path.

This is also the latest exploration of business environment reform. In the 4 years since the listing, the Guangdong FTA pilot area has formed 456 institutional innovation achievements. According to the third party organization's evaluation, Guangdong's FTA test area has 32 place in the global simulation of business environment.

More preferential measures for Hong Kong and Macao

The guidelines issued by the Guangdong pilot Free Trade Zone, in the form of positive lists, include 67 management measures, namely, banking institutions, securities, funds, futures, insurance, financial leasing, financial leasing, and 14 types of financial enterprises such as money brokerage company, financial companies, shareholders' organization type requirements, shareholders' asset size requirements, shareholders' performance requirements, ownership structure restrictions, business scopes, and establishment procedures.

Among them, including foreign investment in the establishment of financial institutions (market access restrictions) and foreign capital access business management (national treatment restriction) and other contents, and based on this, a series of detailed and positive management measures are added, which are very rich in content.

The guideline states that if a foreign bank set up several branches in China, if the management bank has been allowed to start derivatives trading business, it can authorize other branches to start derivatives trading business, allow financial leasing companies to set up subsidiaries, and do not have minimum registration capital restrictions. Moreover, these management measures all set out the basis of the relevant national policy documents.

The guidelines also add a lot of features to the Guangdong FTA pilot area, such as clearly simplifying the access mode of institutions and executives in the Guangdong FTA pilot area.

Through sorting out the CEPA and its supplementary agreements, there are many more open measures for Hong Kong and Macao. For example, it is clear that the total assets of Macao bank at the end of the year before the application of Hengqin branch or corporate body should be no less than 4 billion US dollars; the insurance companies supporting Hong Kong and Macao will participate in and share the development of the mainland insurance market, and support eligible Hong Kong and Macao insurance companies to participate in the operation of compulsory liability insurance for mainland traffic accidents.

Why do we need to specify management measures in detail?

Wang Meng, director of the innovation Department of Guangdong's free trade office, told the twenty-first Century economic news reporter that the move is aimed at providing a clearer guide for foreign investors to enter the financial services industry in Guangdong's FTA pilot area. Although the restrictions on foreign investment in the financial industry are relaxed at the national level, it is far from enough from the practical level, and foreign investment faces many practical operational problems in the process of entry.

"The opening of the financial industry is more complicated, and the management of light foreign exchange involves more than 200 laws and regulations." Wang Meng said, therefore, many necessary conditions, qualifications and procedures should be listed to enhance transparency, clarity and practicality.

"Financial liberalization is a systematic business and cannot be driven by past trade patterns." Chen Peng, Secretary General of Qianhai Innovation Research Institute of Shenzhen, told reporters on twenty-first Century economic report that after the implementation of the foreign investment law, there will be many related macro policies in China, but landing is the key, which requires more similar top-level and grassroots linkage exploration.

Business environment global simulation ranking thirty-second

Over the past 4 years, 456 innovative achievements have been formed in the Guangdong free trade pilot area, and 33 have been replicated nationwide, 102 have been replicated to Guangdong Province, and 92 institutional innovation cases have been released.

From the point of view of innovation type, the Guangdong FTA pilot area has actually explored in many fields, including 15 cases, such as investment and trade facilitation, international business environment, and financial opening and innovation cases.

For example, Qianhai's "eagle eye system in Qianhai" is the first application of the national Internet financial risk prevention technology in the nationwide FTA pilot area. Last year, the system monitored the online public opinion of nearly 6 Qianhai financial enterprises, and set up a risk monitoring report for 87 institutions to assist the Shenzhen finance office to carry out verification of 271 institutions.

"In 2018, the Nansha port declared that there were about 14 thousand parallel imported vehicles, with a value of US $780 million, representing an increase of nearly 50%, which has jumped to the second largest parallel import port in the country." In April 22nd, Luo Jianwen, director of the Guangzhou Nansha District port office, told the economic report reporters in twenty-first Century that this is the result of institutional innovation.

At the Nansha port's innovative "new mode of convenient customs clearance and bonded display trade of imported cars", the incoming vehicles can be immediately detected on-line to achieve the whole process of video surveillance, and the efficiency of vehicle detection has also increased by three times.

It is precisely because of the institutional innovation that the business environment of Guangdong pilot area has greatly improved. According to the cross border financial index released by Qianhai innovation and Research Institute, as of the end of the fourth quarter of 2018, Qianhai's cross-border financial index was 5557.03, an increase of 6.94% over the same period last year. In addition, the Investment Facilitation Index of Guangdong FTA pilot area in 2018 increased by 55.9% compared with the base period in 2014, while the trade facilitation index increased by 17.9% compared with 2017 (base period).

The third party assessment agency KPMG released the China (Guangdong) free trade pilot area business environment assessment analysis report, according to the world bank index system simulation, Guangdong free trade test area business environment convenience score is 77.31, the global simulation ranked 32, including start-up enterprises, access to electricity and execution contracts three entered the first fifteen of the world.

The optimization of business environment also brings visible results. From April 2015 to the end of 2018, there were more than 250 thousand new enterprises in the Guangdong free trade pilot area, and the actual utilization of foreign capital increased by 28.3% annually. In 2018, the investment in fixed assets of the Guangdong free trade pilot area reached 128 billion 325 million yuan, the tax revenue was 68 billion 42 million yuan, and the foreign trade import and export amount was 902 billion 670 million yuan, accounting for 12.6% of the total. 70 world top 500 enterprises have invested 309 enterprises in the Guangdong FTA pilot area, attracting 79 headquarters enterprises.

However, in Guangdong's FTA pilot areas, such as tax payment and construction permit, are relatively low in the simulated rankings. This indicates that there are still short board reforms in Guangdong's FTA pilot business environment.

On the same day, a number of reports also suggested that the Guangdong free trade pilot area should deepen decentralization, promote government governance and create an international, market-oriented and rule based business environment. For example, we should set up a one-stop online publishing platform for provincial enterprise related policies, optimize and rebuild the process of government service, and solve obstacles in flow of restrictive elements.