The Supreme People’s Court has recognized the increasing borrowing and lending activity between enterprises as valid, but experts caution that restrictions remain of which corporate borrowers and lenders should be aware.
The much-anticipated Regulations on Several Issues Concerning the Laws Applicable in the Trial of Private Lending Cases, effective 1 September, set out that legal persons and other entities can participate in private lending activity in addition to natural persons.
“As stipulated, a recognized Hong Kong fund should appoint an agent in mainland, while a mainland fund should find a representative in Hong Kong, and the agent or representative … will play a crucial role in the sale of the funds in the host jurisdictions”, Charles Qin told China Business Law Journal.
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