Legal and Regulatory Updates
Announcement on Tax Credit Policy for Foreign Investors Using Distributed Profits for Direct Investments
To attract foreign investment and promote reinvestment of profits in China, a new tax credit policy has been introduced, offering eligible overseas investors a 10% tax credit on direct reinvestments from distributed profits. This initiative not only provides significant tax savings but also aligns with China’s commitment to high-quality economic opening. With clear eligibility requirements and operational processes, foreign investors can optimize their capital allocation while enjoying the benefits of this policy. Discover how to maximize your investment returns in China. Read on to learn more!
China Issues Implementation Measures for the Administration of Company Registration
On December 20, 2024, the State Administration for Market Regulation (SAMR) issued the Implementation Measures for the Administration of Company Registration (“SAMR Order No. 95”), effective February 10, 2025. As a departmental regulation issued under the State Council’s authority, SAMR Order No. 95 standardizes how local registration authorities administer company registration, ensuring compliance with China’s broader corporate governance reforms.
Navigating the New Anti-Money Laundering Landscape: A Compliance Guide to China’s 2024 Anti-Money Laundering Law for Foreign-Invested and Outbound Enterprises
The 2024 revision of China’s Anti-Money Laundering (AML) Law brings significant updates to combat financial crimes. Effective January 1, 2025, the law introduces a risk-based approach, expands predicate offenses, and strengthens compliance obligations for financial institutions. Foreign-invested and outbound enterprises must adopt robust AML practices, including thorough due diligence and transparent financial transactions. Advanced technologies like AI and blockchain are encouraged for AML monitoring, reflecting the law’s focus on evolving risks. The revision also emphasizes international cooperation, aligning China’s efforts with global AML standards and reinforcing compliance for enterprises with cross-border operations.
Hong Kong Unveils New Cybersecurity Bill
Hong Kong has introduced the Protection of Critical Infrastructures (Computer Systems) Bill (“PCI Bill”), aiming to safeguard critical infrastructure sectors like banking, healthcare, telecommunications, and transport from cyber threats. The bill imposes obligations on operators, including establishing specialist cybersecurity units, adopting preventive measures, and promptly reporting incidents. A Commissioner’s Office will oversee compliance and assist during emergencies. By aligning with international standards, the PCI Bill enhances Hong Kong’s cybersecurity framework, ensuring operational continuity in critical sectors. Businesses should prepare to meet the bill’s requirements and strengthen their cybersecurity protocols.
New Implementing Measures for Company Registration in China
The State Administration for Market Regulation issued Order No. 95, introducing new Implementing Measures for the Administration of Company Registration in China, effective February 10, 2025. These regulations aim to enhance transparency, compliance, and efficiency in company registration, affecting both domestic and foreign enterprises. Key highlights include stricter oversight of capital contributions, mandatory registration liaison officers, and detailed requirements for intermediaries. Companies must also align their business scope with capital requirements and adhere to market access policies. CW provides expert guidance to ensure compliance with these measures and streamline the registration process in China.
China Further Relaxes Visa-free Transit Policy
China has expanded its visa-free transit policy, effective 17 December 2024, to allow eligible foreign nationals to stay up to 10 days (240 hours), up from the previous 72-144 hours. The policy also increases the number of visa-free entry ports from 39 to 60, with new additions in Anhui, Guizhou, Hainan, Jiangxi, and Shanxi provinces. Nationals from 54 countries, including the US, UK, and Brazil, qualify for this policy. Additionally, China’s unilateral visa exemption program now offers extended stays of up to 30 days and includes academic and cultural exchanges as valid travel purposes.
