Only a day after announcing it would relax the regulations on foreign investment and offshore vehicles, director-general of China's State Administration of Foreign Exchange (SAFE) Liu Guangxi was in town for talks last week with the Monetary Authority of Singapore, banks, and local firm Colin Ng & Partners (CNP).

The delegation, which included other directors from SAFE headquarters and regional offices, met with lawyers from CNP's Greater China practice group at a luncheon and discussed issues regarding the restructuring and listing of overseas companies in Singapore.

The timing could not have been better for the firm, coinciding with the issue of the previous day's ruling from SAFE.

Coming into effect in November, the eagerly anticipated circular will replace the two rules on capital flight and tax issues promulgated early this year, which had dampened overseas listings of Chinese private firms.  

According to a SAFE statement in the Shanghai Daily, the following changes have been proposed in an attempt to boost the development of high-tech entities and venture capital firms, and to tackle the problem of cross-border capital flow monitoring:

• residents and companies will now be allowed to set up special purpose entities to access the overseas capital markets
• overseas SPVs can sell convertible bonds, make acquisitions and conduct share swaps to raise funds for companies inside China
• the SPVs must transfer income back to China within 180 days of them making a profit
• they are allowed to buy stakes in firms inside China, and set up foreign-invested ventures to buy or control their Chinese companies after they acquire funds from overseas capital markets