Following the success of the Nansha Free Trade Zone, the Hengqin Guangdong-Macao Deep Cooperation Zone has been approved as a Qualified Foreign Limited Partner (QFLP) pilot area, enhancing foreign exchange management for private equity funds. The National Foreign Exchange Administration (SAFE) Guangdong Branch issued implementation rules on September 17, allowing Hengqin-based funds to enjoy simplified registration, flexible capital management, and streamlined cross-border currency exchange.

Under the new framework, fund management companies can freely transfer capital within registered limits and between multiple QFLP pilot funds, benefiting from a “shared quota and dynamic adjustment” model. Simplified registration now centralizes foreign exchange approval at the fund manager level, removing the need for each fund to register separately. Cross-border transactions are also expedited, with reduced documentation requirements and lower operational costs.

The rules apply to private equity funds legally established in Hengqin and raising capital from approved foreign investors, including individuals, institutions, and investors from Hong Kong, Macau, and Taiwan. Funds must comply with China Securities Regulatory Commission and Asset Management Association of China regulations, adhere to national industrial and investment policies, and engage in transactions with legitimate economic substance.

A dedicated QFLP account monitors all fund inflows and outflows, with trustees overseeing compliance in real time. Funds may remit capital and returns, convert foreign currencies into RMB, or transfer between accounts under SAFE supervision. Banks may process cross-border settlements directly, provided tax obligations are met and fund usage aligns with approved investment plans.

SAFE Guangdong Branch and Zhuhai Branch will coordinate with local financial authorities to ensure effective supervision, risk mitigation, and continuous enhancement of the pilot service ecosystem. By granting fund managers greater operational autonomy and facilitating cross-border investment, the Hengqin QFLP pilot aims to attract global private equity capital, support regional financial integration, and reinforce Hengqin's role as a high-level open economy hub.

Key Highlights:

• Flexible quota management across multiple QFLP funds

• Centralized foreign exchange registration at fund manager level

• Streamlined cross-border remittance and settlement procedures

• Eligibility includes investors from Hong Kong, Macau, and Taiwan

• Effective from October 16, 2025

For international investors, the Hengqin QFLP pilot signals a more efficient, transparent, and responsive regulatory environment, enabling faster capital deployment, enhanced operational flexibility, and a clear framework for cross-border fund operations.