On 7 Jan. 2022, China Banking and Insurance Regulatory Commission (CBIRC) issued the “Administrative Measures for Project Companies of Financial Leasing Companies” (hereinafter “the Measures”, 金融租賃公司項目公司管理辦法) with effect on 7 Jan. 2022.
It is an international practice in the leasing industry to carry out aircraft and ship leasing business through project companies as special purpose vehicles (SPVs).
The Measures aims to regulate the financial leasing business of project companies of financial leasing companies.
The Measures applies to financial leasing companies and the specialized subsidiaries of financial leasing companies. They can set up project companies in domestic areas including bonded areas, pilot free trade zones, free trade ports, as well as overseas to carry out financial leasing business.
Besides, the specialized subsidiaries may also establish offshore project management companies that invest or manage other project companies or issue bonds for the purpose of raising funds for other project companies.
These offshore companies are still subject to the supervision of Chinese banking and insurance regulatory authorities.
Cover Photo by Alexander Kaunas on Unsplash
Contributors: CJO Staff Contributors Team
