First MNC global treasury center function realized in FTZ

Tracy Li
The new advanced cross-border pooling structure is an expansion of the free trade account initiative to provider better financial services in the Shanghai Free Trade Zone.
Tracy Li

China (Shanghai) Pilot Free Trade Zone has received a birthday gift for its fourth anniversary — the first international company began to implement a global treasury center function here. .

This is an expansion of the free trade initiative to implement  the People’s Bank of China’s policy to expand financial services and support technological innovation and economic progress in the zone.

The launch of a new structure under the advanced cross-border pooling program by Citi for Aland Group marks the first international company to begin a global treasury center function by opening a non-resident free trade account in the zone.

By encouraging multinational corporations to open global treasury centers in the FTZ, non-free trade-registered entities, including overseas entities, will receive the benefits and convenience of the free trade policy.

“The new cash-pooling structure enables us to achieve our objective of global treasury centralization and meet our business requirements to concentrate domestic funds in this headquarters,” said Aland President Chang Liang.

Citi China said in a statement that by leveraging flexible foreign exchange conversion and RMB/foreign currency integration in the free trade zone operation, this advanced cross-border pooling solution is a useful tool for overseas portfolio management.

Thanks to this program, multinational treasury centers will be able to centralize the global funds in their original currency into a free trade account, then they can freely conduct foreign exchange conversions based on their needs.

The free trade account for Shanghai’s free trade zone was launched by China’s central bank in 2014, as an instrument to test China’s capital account conversion in a risk-controlled environment.

Last November, the Shanghai headoffice  of the People’s Bank of China issued relevant policies to encourage the establishment of a fully functional onshore cross-border RMB pool, so that multinational enterprises could realize centralized management of their global RMB funds. 

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