China expands cross-border cash pooling regime for multinationals

6 October 2026

On 14 September 2026, the Notice on Matters Concerning the Cross-Border Centralised Operation of Renminbi and Foreign Currency Funds by Multinational Corporations (Yin Fa [2026] No. 163) (“Notice”) came into effect. The Notice, dated 13 August 2026, was jointly issued by the People’s Bank of China (“PBOC”) and the State Administration of Foreign Exchange (“SAFE”). The Notice is intended to facilitate the centralisation and use of funds by multinational groups, deepen high-level financial opening, and support the high-quality development of the real economy.

The Notice permits eligible multinational groups to conduct one or more cash pooling activities, including the centralised management of external debt and overseas lending quotas, centralised receipts and payments under the current account, and netting. A multinational group must designate an eligible onshore member with independent legal person status as the principal enterprise responsible for matters including filing, implementation, and data reporting. Financial institutions, local government financing vehicles, and real estate enterprises may not participate in cash pooling. However, a finance company may act as the principal enterprise, although it may not participate in the centralised management of external debt or overseas lending quotas.

Broader access to cross-border cash pooling

The Notice establishes alternative financial thresholds for participation. The aggregate annual renminbi and foreign currency international receipts and payments of all onshore members in the preceding year must be at least the equivalent of RMB700 million. Alternatively, the aggregate annual revenue of all onshore members in the preceding year must be at least RMB1 billion and that of all offshore members in the preceding year at least the equivalent of RMB200 million.

The following lower thresholds apply where the principal enterprise is registered in a pilot free trade zone:

• Aggregate annual international receipts and payments of all onshore members in the preceding year of at least the equivalent of RMB350 million; or
• Aggregate annual revenue of at least RMB500 million for all onshore members and the equivalent of RMB100 million for all offshore members in the preceding year.

PBOC and SAFE have stated that the Notice supports small and medium-sized multinational groups on a wider scale by extending the pilot policy nationwide, and the threshold for establishing a pool may be lowered further where the principal enterprise is registered in a pilot free trade zone, thereby continuously releasing policy benefits.

Participating groups must also satisfy other eligibility requirements, including having genuine business needs, a sound cross-border fund management structure, internal controls, and an internal electronic management system. There must be at least three member enterprises in total, onshore and offshore combined, and the group and its members must satisfy specified compliance requirements relating to matters including cross-border receipts and payments (no major violations in the past two years), trade foreign exchange classification (Class A for the principal enterprise and other members listed in the trade foreign exchange directory), outbound investment requirements where an offshore member has been established by an onshore enterprise, and cross-border renminbi business.

Greater flexibility in managing cross-border funds

Under the Notice, multinational groups may centralise the external debt and overseas lending quotas of participating onshore members, and each participating onshore member may decide the proportion of its quota to be centralised, which may be adjusted at most once a year. Quota that is not centralised may continue to be used by the relevant member in accordance with the applicable rules. The Notice also permits renminbi and foreign currency funds to be managed through the same domestic master account, facilitating group-level allocation of cross-border funds while allowing members to retain flexibility over their own funding needs.

The domestic master account may also be used centrally for the foreign exchange settlement and purchase relating to current account transactions, direct investment, external debt, and overseas lending. The Notice further streamlines the use of capital-account receipts by allowing payments of capital-account receipts held in the domestic master account to be processed on the basis of an undertaking by the principal enterprise as to the authenticity and compliance of the underlying transaction, without requiring transaction-by-transaction supporting documents to be provided to the cooperating bank in advance, although applicable restrictions on the use of capital-account funds continue to apply.

The Notice also streamlines certain administrative procedures. The SAFE branch where the principal enterprise is located acts as the single window for business filing and registration, while changes to participating members that do not involve external debt or overseas lending quotas may be handled by the cooperating bank, provided that the principal enterprise reports the change to that bank within 30 days of the change, together with supporting documents. Once the relevant filing has been completed, the SAFE branch will carry out a one-off registration of the centralised external debt and/or overseas lending quota in accordance with the filed amount.

Impact on existing arrangements

From 14 September 2026, newly established cash pooling arrangements across China, other than integrated renminbi-and-foreign-currency cash pools, and existing multinational cross-border centralised fund operation arrangements are governed by the Notice. The 2019 Provisions on the Administration of Cross-border Centralised Fund Operations by Multinational Corporations (Hui Fa [2019] No. 7), issued by SAFE, were repealed on the same date, and Article 3 of SAFE’s Notice on Further Promoting the Reform of Foreign Exchange Administration and Improving Genuineness and Compliance Review (Hui Fa [2017] No. 3) ceased to apply.

Multinational groups should also note that a group conducting cash pooling business under the Notice generally may not simultaneously operate another cross-border cash pooling arrangement, subject to an exception for groups that have already completed filing for a cross-border two-way renminbi cash pool under the relevant existing rules.

The nationwide rollout gives more multinational groups with operations in China access to a framework for centrally managing their cross-border renminbi and foreign currency funds, while providing greater flexibility in the allocation of external debt and overseas lending quotas and simplifying certain filing, registration and capital account procedures. Multinational groups with existing cross-border centralised fund arrangements, as well as groups considering establishing new arrangements, should consider how the Notice may affect their treasury arrangements.

Reference materials

The PBOC and SAFE announcement and the Notice are available on the SAFE website www.safe.gov.cn.