The People’s Bank of China has granted Luxembourg a quota of RMB50bn (£5.3bn, $8.1bn, €7.3bn), allowing offshore renminbi to be reinvested in Chinese A-Shares.
“The granting of the RQFII quota again demonstrates China’s recognition of the Luxembourg financial centre as one of Europe’s main hubs for international renminbi business,” said Luxembourg Minister of Finance, Pierre Gramegna.
“We are proud to play such a significant role in the process of the internationalisation of the renminbi.”
Luxembourg for Finance said the RQFII scheme is particularly useful for fund managers who use the Grand Duchy as a platform for cross-border distribution.
It also highlighted that major international and Chinese fund promoters have already set up RQFII funds through Luxembourg-domiciled vehicles, using other jurisdictions’ quotas. In 2013, the Luxembourg regulator authorised the first RQFII fund to be launched under Europe’s UCITS regulations.
The RQFII program launched in Hong Kong in 2011 and has expanded to other jurisdictions. The scheme’s non-renminbi equivalent, QFII, was launched in 2003.
According to Luxembourg for Finance, the country has the most renminbi deposits, loans and investment funds in the whole of Europe.
It was announced in February that QFII and RQFII licence holders would need to file their tax returns before July, a deadline many are finding burdensome.
