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China Tax Credits Policy to Foreign Investors' Direct Investment with Distributed Profits
The Ministry of Finance, the State Taxation Administration and the Ministry of Commerce jointly issued the "Announcement on the Tax Credit Policy for Direct Investment by Foreign Investors with Distributed Profits" on 30 June 2025. From 1 January 2025 to 31 December 2028, foreign investors who use the profits distributed by resident enterprises in China for direct reinvestment within China may enjoy tax credits if they meet the conditions.
SAFE Registration: Chinese Individuals Participating in SIP of Overseas Listed Companies
In order to attract and retain talents, an increasing number of multinational enterprises have implemented Share Incentive Plans (“SIP”). Due to China's foreign exchange control policies, employees in China participating in share incentive plans of overseas listed companies need to go through foreign exchange registration procedures with the State Administration of Foreign Exchange (“SAFE”).
China Expands Cross-border Financing Facilitation Pilot
On 31 May 2022, the State Administration of Foreign Exchange of the PRC released a circular on supporting high-tech enterprises and specialized, sophisticated, distinctive and innovative enterprises to carry out cross-border financing facilitation pilot on its website.
Report of Registration of Overseas Chinese-funded Enterprise
According to the Measures for the Administration of Overseas Investment issued by the Ministry of Commerce of the PRC and other relevant laws and regulations, the responsible person of an overseas Chinese-funded enterprise (institution) or its designated representative shall report to and register with the economic and commercial office of the embassy or consulate of the PRC in the country
Reinvestment of Overseas Chinese-funded Enterprise
As defined by the Ministry of Commerce (MOFCOM) of the PRC, reinvestment of overseas Chinese-funded enterprise refers to the overseas investment made by an overseas destination enterprise that have already completed overseas direct investment (ODI) approval or filing procedures, using its operating profits or self-raised funds from overseas (e.g., loans from overseas banks).
ODI Filing or Approval Requirements in China
According to the relating PRC laws and regulations, overseas direct investment (ODI) conducted by Chinese enterprises are subject to approval or filing procedures with the National Development and Reform Commission (NDRC) or its local branches and Ministry of Commerce (MOFCOM) or its local branches before the investment is made, which aims to ensure the legal and compliant remittance of investment funds.
Cancellation of ODI Filing or Approval in China
In recent years, more and more Chinese enterprises have established companies or branches in other countries in order to explore overseas markets. When an overseas company or branch is cancelled due to project completion or other reasons, does the domestic enterprise is required to cancel the overseas direct investment (ODI) filing or approval obtained before?
Classification of Chinese ODI Projects
As more and more Chinese enterprises carry out overseas direct investment (ODI), China has updated and released a series of regulations and policies on overseas direct investment of enterprises in recent years. Kaizen has summarized the application procedures and reporting obligations involved in the two articles, Guidelines on the Approval or Filing of ODI by Chinese Enterprises and Reporting Obligations for Chinese ODI Investors.
Reporting Obligations for Chinese ODI Investors
The Chinese overseas direct investment (ODI) investors are required to report their overseas investments data to the competent administration authorities in accordance with the laws and regulations when they have completed the filing or approving procedures for overseas direct investment. The competent administration authorities include the relevant commerce bureau, development and reform commission, foreign exchange administration bureau.
Guidelines on the Approval or Filing of Overseas Direct Investment by Chinese Enterprises
With the deepening of China's opening-up and one belt one road construction, more and more Chinese enterprises start to go global. In order to regulate the overseas direct investment (ODI) conducted by Chinese enterprises, the National Development and Reform Commission (NDRC), the Ministry of Commerce (MOFCOM)