Companies in the Shanghai Free Trade Zone may now borrow overseas without prior consent from authorities, the Shanghai headquarters of the People's Bank of China said on Thursday.

Banks and securities brokers have also been allowed to finance overseas. Under the new regulation, companies in the Shanghai FTZ are no longer limited to borrowing Chinese yuan only.

The scale of the financing has also been doubled to up to twice the company' capital.

"Borrowing costs will be greatly lowered and may even be halved," said Wang Jianxin, deputy president of the FTZ branch of SPD Bank.