Multinationals launch centralized cross-border fund operations in renminbi and foreign currencies in Shanghai

Cross-border fund management for multinational companies has entered a new phase of greater convenience.

Recently, the first eight multinational companies in Shanghai rolled out centralized cross-border fund operations in both renminbi and foreign currencies, involving 55 domestic member entities and 10 overseas member entities. Their combined external borrowing quota exceeded 50 billion yuan, while their overseas lending quota topped 8 billion yuan. The companies span a range of industries, including advanced manufacturing, energy trading, modern services, and food and consumer goods.

Centralized cross-border fund operations in renminbi and foreign currencies allow multinational companies to centrally manage their domestic and overseas funds in both currencies based on their operational and management needs. The framework covers centralized fund pooling and allocation, centralized receipts and payments under the current account, and net settlement.

Specifically, the new policy offers greater convenience in three main areas. First, it lowers the eligibility threshold for cross-border cash pooling, enabling a broader range of small and medium-sized multinational companies to establish less complex cash pools. Companies whose lead entity is registered in a pilot free trade zone are eligible for an even lower threshold.

Second, the policy facilitates the cross-border pooling and allocation of funds in renminbi and foreign currencies. It allows multinational companies to consolidate the external borrowing and overseas lending quotas of their member entities, determine the proportion of funds to be pooled at their discretion, and manage renminbi and foreign-currency funds through the same account.

Third, the policy streamlines filing and registration procedures. Business filings and registrations are handled externally by the local branch of the foreign exchange authority where the lead entity is based, while certain changes can be registered directly with participating banks. This further reduces institutional transaction costs for companies.

Multinational companies serve as an important link between domestic and international markets, a role that closely aligns with that of foreign banks. As one of the first participating banks, J.P. Morgan assisted two multinational companies, one in the food and consumer sector and the other in advanced medical manufacturing, in implementing the new policy in Shanghai. HSBC China also announced that it had helped two foreign-invested multinational companies, including Carrier Group, launch the new cross-border fund operations in the city.

Gu Wei, vice president of JPMorgan Chase Bank (China) Company Limited, said one of the key features of the new rules is the lower eligibility threshold for cross-border cash pooling, allowing more multinational companies to benefit from the policy and providing tangible support for their operations.

Wang Yunfeng, president and CEO of HSBC China, said the expanded scope of the policy would make it easier for more multinational companies to establish efficient channels for moving funds between China and overseas markets, turning policy benefits into momentum for corporate growth.

A review by International Financial News found that, in addition to Shanghai, the first cases under the new policy have also been launched in Tianjin, Zhejiang, Shandong, and Anhui. The initiative is helping multinationals achieve more refined and coordinated management of their global funds, while providing financial support for international business expansion, capacity upgrades, and technology research and development.