Direct investment is basically fully convertible. The State Administration of Foreign Exchange has abolished all administrative approval items for foreign direct investment and overseas direct investment, which are now handled directly by banks. Companies can open a foreign exchange capital account by completing foreign exchange direct investment registration at a bank, without the need for approval from the State Administration of Foreign Exchange. Cross-border fund inflows and outflows, such as capital and profits, do not require approval from the State Administration of Foreign Exchange as these transactions are handled directly by banks. The People's Bank of China and the State Administration of Foreign Exchange have shifted from pre-approval to macro-prudential management for cross-border credit. Foreign debts and overseas loans are managed according to the principles of macro-prudential management, with cross-border financing risks weighted against a company's net assets to determine the maximum balance for cross-border financing risks or overseas loan balances. After signing cross-border financing contracts or overseas loan contracts, companies must register with the State Administration of Foreign Exchange. Only non-bank institutions engaged in onshore guaranteeing for offshore loans need to register with the State Administration of Foreign Exchange; other cross-border guarantees do not require registration or filing with the State Administration of Foreign Exchange.

Source: One-Stop Service for Investment in Hainan