NCSHA Conference Federal Financing Bank-HUD Financing October 18, 2014.
1 The Bank of East Asia, Limited Financing The Deals How Can Foreign Invested Enterprises Obtain...
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Transcript of 1 The Bank of East Asia, Limited Financing The Deals How Can Foreign Invested Enterprises Obtain...
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The Bank of East Asia, Limited
Financing The DealsHow Can Foreign Invested Enterprises Obtain Bank Financing in China?
Presented by :The Bank of East, LimitedNovember 2002
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� Co-operative Joint Ventures
� Equity Joint Ventures
� Wholly Foreign-owned Enterprises
Foreign Invested Enterprises Include :
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Minimum Registered Capital Required:
For Total Investment Amount
Minimum Registered Capital Required
Below US$3 million (inclusive) 70% of the total investment
Between US$3 million and US$10 million (inclusive)
50% of the total investment, with a minimum of US$2.1 million
Between US$10 million and US$30 million
40% of the total investment, with a minimum of US$5 million
US$30 million (inclusive) or above
33.3% of the total investment, with a minimum of US$12 million
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Maximum Amount Of Foreign Currencies That A Foreign Invested Enterprise Can Borrow
g Total Investment- Registered Capital
$ $ $
g Can be Financed by Shareholders’ Loans and/or Other Financing Channels
g No such restriction on RMB financing
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� Shareholders’ Loan Agreement
� Tenor (With Prepayment Clause)
� Interests Charged
� Registered With State Administration of Foreign Exchange (“SAFE”)
Shareholders’ Loans
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� Bank Loans
� Trade Finance Facilities
� Leasing / Hire Purchase
� Receivable Financing / Factoring
� Bank Guarantees / Standby L/C’s
� Venture Capital Funds
Financing Channels
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Factors To Be Considered
•Guangdong Province
•Guangxi Province
•Hunan Province
•Zhejiang Province•Jiangsu Province
•Greater Shanghai
•Dalian •Tianjin •Shenzhen Special Economic Zone
Currencies (RMB/ HKD/ USD)Only those approved foreign banks are allowed to extend RMB loan facilities to foreign invested enterprises incorporated in the following provinces / cities:
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Factors To Be Considered (cont’d)
Loan Tenor
Interest Rate• HKD / USD : LIBOR / HIBOR / Prime Rate
Plus Basis• RMB : PBOC’s Base Lending Rate
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Current PBOC’s Base Lending Rate (For reference only)
Tenor Interest Rate (% p.a.)
<= 6 months 5.04
6 months & <= 1 year 5.31
1 year & <= 3 years 5.49
3 years & <= 5 years 5.58
5 years 5.76
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Major Assessment Criteria
Management experience and integrity
Financial strength of the borrowers / guarantors
Repayment ability of the borrowers
Marketability of the project, industry business prospects and project viability
Past performance
Security
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Acceptable Security
Time Deposits
Bank Guarantees or Standby L/Cs
Properties in HK or the PRC(Commercial units, residential units, factory plants or retail properties)
Quoted Shares
Corporate / Personal Guarantees
Machinery and Equipment
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Acceptable Security (cont’d)
Remarks : Not all the cities in the PRC allow the registration of the charge of properties by banks without branches in the PRC