22 Oct 2019
China Approves Overseas Ownership of Mainland Insurance and Fund Management Firms
As part of ongoing moves to open up its financial sector, China has given the go-ahead for 100% overseas ownership of mainland-based insurance and fund management firms. In order to facilitate this, it has had to amend two sets of regulations – The Regulations on the Administration of Foreign-funded Insurance Companies and The Regulations on the Administration of Foreign-funded Banks.
Key details of these amendments, which have come into immediate effect, are listed below:
Regulations on the Administration of Foreign-funded Insurance Companies
- The requirements that overseas insurance companies applying to establish foreign-funded insurance companies should have been active in the insurance sector for more than 30 years and have maintained a representative office on Chinese territory for more than two years are both rescinded
- Foreign insurance groups are now permitted to invest in and establish overseas-funded insurance companies on Chinese territory, with non-mainland financial institutions also permitted to hold a stake in overseas-funded insurance companies
Regulations on the Administration of Foreign-funded Banks:
- The requirement that the total assets of the sole or controlling shareholder of the proposed wholly foreign-owned bank, the sole or major foreign shareholder of the proposed Sino-foreign joint-venture bank, and the foreign bank of the proposed branch at the end of the year prior to the submission of application for establishment should match or exceed a pre-designated level is rescinded. The requirement that the sole or primary Chinese shareholder in a proposed Sino-foreign joint venture bank shall be a financial institution is also rescinded
- Foreign banks are now permitted to both establish wholly overseas-owned banks and branches of foreign banks on Chinese territory and to establish branches of Sino-foreign joint venture banks and foreign banks
Full details of the amendments of the Regulations on the Administration of Foreign-funded Insurance Companies and the Regulations on the Administration of Foreign-funded Banks can be found in Decree No. 720 of the State Council, as recently approved by Chinese Premier Li Keqiang.
Source: State Council