Shanghai Free Trade Zone is no longer helpful in terms of getting funds out of China. The CreditEase deal happened over two years ago. The structure in that deal is no longer a viable option for outbound real estate investment.
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How can the Shanghai Free Trade Zone help funds get funds out of China?
I heard that CreditEase was the first to successfully use the “fast track” outbound investment approval scheme in the Shanghai Free Trade Zone. We are interested in knowing if Chinese investors are currently able to extract capital in this manner.
Answers
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The benefit of SH FTZ is that projects within the provincial level approval authority in Shanghai are all delegated to the SH FTZ so that it is a much quicker process. Generally, outbound investment projects within US$300 million are delegated to the provincial level. CreditEase's IPO in the US is a typical VIE structure--which is a different story—and, typically, it doesn't involve transferring money outside of China.
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Thank you for your question. I have some familiarity with multiple programs related to the Shanghai FTZ, including the QDLP program. As you know, many of the programs have undergone substantial changes recently due to the new policies. My impression is that investment approval still depends on the intended area of investment (real estate is currently more difficult). Please feel free to contact me directly via my profile.
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