China: An overview of the QFLP pilot program and expectation

In brief

The Qualified Foreign Limited Partnership (QFLP) is a pilot program developed by various local authorities serving as an essential channel for foreign investors to invest in China's financial market. Under QFLP, foreign investors are able to participate in the establishment of a foreign-funded equity investment management enterprise (QFLP Manager) or a foreign-funded equity investment enterprise (QFLP Fund) (QFLP Manager and QFLP Fund are collectively referred to as QFLP Enterprises). The most obvious advantage of QFLP is that foreign exchange funds can be settled in RMB at the fund level and make equity investment in RMB, in other words, foreign exchange settlement will be approved in advance at the time when a QFLP enterprise is set up, instead of when the capital is called.


QFLP was firstly introduced in 2010 in Shanghai and then consecutively available in Beijing, Chongqing, Tianjin, Shenzhen, Qingdao, Guizhou, Pingtan, Zhuhai, Guangzhou, Xiamen, Suzhou, Hainan, Nanning, Xiong'an, Nanjing and thereafter more cities or regions. Based on the different development history and practical needs of cross-border investment, the approaches to QFLP across different cities or regions have their own characteristics. Under this background, how to select the appropriate QFLP pilot shall be the primary issue for foreign investors.

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