Two departments have issued the "Regulations on the Management of Overseas Loans by Domestic Enterprises," which clarify that the limit on overseas loans is linked to the owners' equity.

On March 20, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Notice on the Issuance of the Management Measures for Domestic Enterprises' Overseas Loans." The main content of the notice includes: first, integrating the RMB and foreign currency overseas loan business of domestic enterprises into unified management to facilitate efficient operation of both domestic and foreign currency loan businesses under the same rules. Second, subjecting domestic enterprises' overseas loans to macro-prudential management, linking the upper limit of overseas loan balance to their equity, and supporting businesses in conducting transactions within the balance limit. Third, raising the macro-prudential adjustment coefficient for domestic enterprises' overseas loans from 0.5 to 0.6, overall increasing the upper limit of overseas loan balance to better meet the funding needs of cross-border operations. Fourth, specifying the management and fund usage requirements for domestic banks and enterprises in handling overseas loan businesses to effectively mitigate risks. The original text is as follows: The People's Bank of China and the State Administration of Foreign Exchange issue the "Management Measures for Domestic Enterprises' Overseas Loans" In order to thoroughly implement the spirit of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China and the "Fifteen-Year Plan" deployment, enhance the level of capital project openness, and meet the reasonable funding needs of enterprises for cross-border operations, on March 20, 2026, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Notice on the Issuance of the Management Measures for Domestic Enterprises' Overseas Loans" (hereinafter referred to as the "Notice"), to further support and regulate the overseas loan business of domestic enterprises. The "Notice" mainly includes: first, integrating the RMB and foreign currency overseas loan business of domestic enterprises into unified management, facilitating businesses to efficiently carry out both domestic and foreign currency loan businesses under the same rules. Second, subjecting domestic enterprises' overseas loans to macro-prudential management, specifying that the upper limit of the overseas loan balance is linked to their equity, and supporting businesses to conduct transactions within the balance limit. Third, raising the macro-prudential adjustment coefficient for domestic enterprises' overseas loans from 0.5 to 0.6, overall increasing the upper limit of overseas loan balance to better meet the funding needs of cross-border operations. Fourth, clarifying the management requirements and fund usage requirements for domestic banks and enterprises in handling overseas loan businesses to effectively mitigate risks. Next, the People's Bank of China and the State Administration of Foreign Exchange will promote the gradual implementation of the "Notice" to effectively utilize the overseas loan business in serving the real economy, facilitating cross-border trade, and investment facilitation. This article was selected from the official website of the People's Bank of China. Edited by GMTEight: Liu Jiayin.