What Is Cross-Border Financing?

In fact, offshore financing is mainly through the capital market and the money market. The most common are stocks and debt. However, it can also be divided into internal financing and external financing, which is not much different from domestic financing. The only difference in the degree of development is the different controls. There is basically no change in financing methods

Offshore financing

What is offshore financing? In fact, it is mainly through the capital market and the money market. The most common are stocks and debt. But you can also press

According to China's current policy, the foreign-funded enterprise's management policy for borrowing foreign debt is looser than that of domestic-funded enterprises. Foreign-funded enterprises can allow foreign borrowing to be freely borrowed within the difference between the approved total investment and the registered capital. In order to facilitate the financing from overseas, many domestic-funded enterprises have achieved foreign capital through various methods. For example, in 2004, Tianjin Shunchi Real Estate Company and Hebei Tianshan Real Estate Company were restructured into foreign-funded enterprises through "self-acquisition", and quickly established convenient international financing channels.

Several well-developed offshore financial centers are the British Virgin Islands (bvi), Panama, the Cayman Islands, and Bermuda. The Macau Special Administrative Region of China also issued the The Shore Act, which was formally implemented in mid-2000, hopes to make full use of Hong Kong's status as an international financial center, production bases in the Mainland, and Macao's preferential tax policies to promote the development of Macau and the economic integration of the Greater Pearl River Delta region. These overseas financial centers all have the following characteristics:

1. Political and economic stability

Because overseas companies are mostly used to protect property, if the local government of registration is unstable, the company's property, such as deposits, may be confiscated or nationalized.

2. Developed financial industry

Banking and commercial activity information is strictly protected by law: For example, in the Virgin Island government law, the courts in Virgin Island will not order the relevant banks or company registration agents to inform other governments or third parties about their customers unless they involve criminal offences related to drug smuggling. Information; plus the register of directors and shareholders of the Virgin Island Company is not a public record. Except for the authorization of the directors, other persons cannot obtain the relevant information.

3. Enough legal protection

As an overseas financial center, one of the main points is to protect the investment of investors. Complete legal guarantees, experienced courts and judges are indispensable. For example: Jersey's Trust Law and Virgin Island's International Business Corporation Law.

4. Non-residents are free to enter and leave without foreign exchange control

Most foreign companies have no controls on foreign exchange and capital flows.

5. Loose tax regulations, exemption of income tax or tax rate from overseas sources is extremely low

6. Most of them are members of the Commonwealth, and most of their legal systems are common law systems of the United States and Britain.