Qualified Foreign Institutional Investor (QFII) Scheme was introduced in 2002, and was one of the first key efforts to internationalize mainland China’s financial markets. It is a transitional arrangement that allows international institutional investors who meet certain qualification to directly invest in a permitted range of financial products in mainland China’s capital market, in the context of incomplete free flow of capital accounts.

RMB Qualified Foreign Institutional Investor (RQFII) was launched in late 2011, which allows qualified foreign investors in certain pilot countries or regions to directly invest in mainland China’s capital market using offshore RMB.

A major revision took place in September 2020, where the previously separate regimes for QFII and RQFII qualifications and rules are integrated; qualification requirements are relaxed; application documents are streamlined; review cycle is cut short; and a simplified reviewing procedure is applied. The restriction on the number of intermediaries servicing a QFII or RQFII is removed; supervision over the reporting and filing of QFIIs and RQFIIs is improved; and requirements for data submission are reduced.

In general, to invest through the QFII/RQFII scheme, an investor has to apply for a QFII/RQFII license at the China Securities Regulatory Commission (CSRC), and then file or apply for investment quota at the State Administration of Foreign Exchange (SAFE) before starting to invest.