Frequently Asked Questions

27 2026-10

How to handle the registration of foreign debts?

The registration system is implemented for foreign debt registration. Debtors shall handle the registration of signing the contract and drawing funds respectively after signing the contract and before drawing funds; according to Guidelines No. 19 [2013] of the State Administration of Foreign Exchange, the authenticity of the materials and the compliance of the use of the funds are the key to succe...

Learn more >
27 2026-10

How to register a cross-border fund pool?

The cross-border fund pooling system implements a filing system. The sponsoring enterprise shall meet the threshold of international payment scale and submit materials to the foreign exchange bureau. According to the Guidelines on Foreign Exchange Management No. 7 [2019], after the filing is approved, the enterprise can carry out the collection and adjustment of funds. The key to successful filing...

Learn more >
27 2026-10

Will I be punished if I falsify the purpose of currency exchange?

If the foreign exchange transaction involves fictitious purposes such as fraudulently purchasing foreign exchange or evading foreign exchange regulations, the foreign exchange administration authority may impose a fine and confiscate the illegal income; if the circumstances are serious, it may constitute a criminal offense. Therefore, it is necessary to truthfully declare the transaction and keep ...

Learn more >
27 2026-10

Can an assignment and guarantee be used to oppose other creditors?

After the completion of the public announcement of the change of rights in the assignment of guarantee, the guarantor may be compensated preferentially for the subject matter, with priority over ordinary creditors; if the announcement is not made, the guarantee only has the effect of a creditor's right, which is difficult to resist against bona fide third parties.

Learn more >
27 2026-10

When a mortgage and a pledge exist simultaneously, who takes priority?

When the same property is subject to both a mortgage and a pledge, the order of repayment shall be determined in accordance with the registration and delivery time in accordance with Articles 414 and 415 of the Civil Code, and the repayment shall be made in parallel according to the proportion of the creditor's claims.

Learn more >
26 2026-10

How to lock in the maximum amount of the guarantee for a creditor?

The maximum amount of the guarantee must be agreed upon in the contract during the period when the creditor's rights are determined and the maximum amount of the creditor's rights, and the registration must be completed. According to Articles 420 and 423 of the Civil Code, the creditor's rights that occur continuously within a certain period of time must be locked in.

Learn more >
26 2026-10

How to determine fraudulent payments in a letter of guarantee?

The fraudulent payment of a guarantee letter shall be determined according to the exceptions of fraudulent guarantee letters: if the beneficiary knows that there is no real transaction, fictitious underlying transaction, or abuse of the right to request payment, it constitutes fraud, and the issuer may claim to stop the payment.

Learn more >
26 2026-10

Can an independent guarantee be stopped by the court?

An independent guarantee can be stopped by the court, but it requires proof that the beneficiary committed fraud or that the payment request is clearly unfounded. According to Article 12 of the Supreme Court's Regulations on Independent Guarantees, stopping payment is an exceptional remedy and usually requires a guarantee.

Learn more >
26 2026-10

Can future accounts receivable be factored in the future?

In the future, accounts receivable can be factored, provided that they meet the requirements of specificity and reasonable predictability. According to Article 761 of the Civil Code, accounts receivable that are yet to be obtained can be transferred, the key point being that the underlying transactions must be genuine and the amounts involved must be identifiable.

Learn more >
26 2026-10

Can the factor refuse to recover the debt from the debtor?

The factor collects the payment from the debtor. The debtor may refuse to pay on the grounds of defenses based on the underlying contract (such as non-delivery, quality defects), but only on the basis of the underlying relationship. The debtor may not use the unknown transfer to oppose the bona fide factor.

Learn more >