How do you establish a cash pool in the Shanghai FTZ?

The procedure for establishing a cash pool differs between RMB and foreign exchange denominated transfers. In both cases, the participating enterprise must sign a contract with a bank in China stipulating the terms of the inter-company loan and describing the enterprise’s size, revenue, and the purpose of the loan. While a term limit of one year applies, this may be extended with permission from the bank. To obtain this agreement, the company will need to submit a copy of its business license and a board resolution in favor of establishing the cash pool.