With the widespread adoption of offshore financing, and cross-border capital operations, an increasing number of domestic individuals establish overseas Special Purpose Vehicles (SPVs) to participate in outbound investment, financing, and return investment activities. To standardize such practices, strengthen foreign exchange supervision, and ensure compliance in capital account flows, the State Administration of Foreign Exchange (SAFE) issued that domestic residents must complete foreign exchange registration for individual overseas investment before contributing domestic or overseas lawful assets or equity to an SPV, or before using the SPV as a vehicle for outbound investment, financing, and return investment.
