Shanghai launches new policy for debt-for-equity swap in order to improve investment and financing environment for foreign-invested enterprises

In order to improve the investment and financing environment for foreign-invested enterprises, Shanghai's municipal government recently published the trial measures for the approval, examination and registration of debt-for-equity swap of foreign-invested enterprises in Shanghai. According to the trial measures, foreign shareholders of foreign-invested enterprises in Shanghai are allowed to use convertible foreign exchange and foreign debts as funds to increase the registered capital. It will be good for foreign-invested enterprises which have been hit by the international financial crisis to reduce debts, restructure assets and improve core competitiveness.