Administrative Measures for Client Due Diligence and Preservation of Clients’ Identity Information and Transaction Records by Financial Institutions
The “Administrative Measures for Client Due Diligence and Preservation of Clients’ Identity Information and Transaction Records by Financial Institutions” will enter into force on 1 March 2022.
Here’s how it will affect the individuals engaging in funds transactions in China: From 1 March 2022 onwards, individuals with cash deposits and withdrawals exceeding RMB 50,000 need to register the source or purpose of funds. In particular:
- When an individual handles a single deposit or withdrawal of more than RMB 50,000, the individual must report the source or use of the funds.
- Individuals handling cash remittance, bill exchange, precious physical metals, purchase of financial products, and other one-time transactions of more than RMB 50,000 need to register the source of funds.
- Those who purchase funds and other financial products from non-account opening institutions should register the source of funds if a single, one-time transaction exceeds RMB 50,000.
Authorities in China have initiated a three-year action plan to combat money laundering
If you are considering setting up a company in China and opening corporate bank accounts, you must pay attention to the following AML (Anti-Money Laundering) Rules update:
In order to further improve the anti-money laundering regulatory system, the People’s Bank of China, the Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission jointly issued the Measures for the Administration of Customer Due Diligence, Client Identity Identification and Materials and Transaction Recording of Financial Institutions, which will take effect on 1 March 2022.
These measures –>
- Clarify the types of financial institutions that are subject to the AML rules
- Emphasize the risk-based approach of the due diligence and the ongoing monitoring measures
- Require enhanced due diligence on high-risk accounts and allow simplified due diligence on low-risk accounts
- Establish a better compliance framework for the identification of the beneficial owners based on international standards
Hong Kong is actively promoting relevant measures to enhance the two-way flow of talents within the Greater Bay Area
Doing business in China’s Greater Bay Area can become more manageable if you consider setting up a company in Hong Kong as an entrepot. One way to look at it is that your non-Chinese senior executives can take advantage of the facilitation measures to apply for a China work permit more efficiently.
Besides, Hong Kong is actively promoting relevant measures to enhance the two-way flow of talents within the Greater Bay Area. For example, the city is working hard on launching the “GBA Travel Document Endorsement and Visa” (大湾区签注、签证) programs as soon as possible to facilitate non-Chinese nationals residing in Hong Kong to travel to the Mainland cities of the GBA for business, research, exchanges, and visits, etc.
Shenzhen is given greater autonomy for pursuing reforms
A guideline containing a total of 24 special measures was jointly issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce to ease market access to sectors including the application of advanced technologies and their industrial development, finance and investment, medicine and health, education and culture, as well as transportation.
Guangdong’s Regulations on Protection of Interests and Rights of Foreign Investors
China’s Guangdong province approved the Regulations on Protection of Interests and Rights of Foreign Investors (“Regulations”), which will come into force on March 1, 2022.
The regulations emphasize equal protection given to foreign investors and foreign-invested enterprises (“FIEs”) with the following highlights:
- FIEs and domestic enterprises should be treated equally in the government funding arrangement, construction of government-invested projects, land supply, tax reduction and exemption, license and permit applications, project applications, professional qualifications and human resources policies, participation in government procurement, tender and bidding, land transfer, and property rights transactions.
- Foreign investors and FIEs are encouraged to voluntarily carry out technological cooperation with various market players and research entities. Both sides should negotiate conditions such as liability for technological infringement and ownership of the improved technology on an equal footing.
- Financial institutions are encouraged to facilitate FIE’s receipt and payment of foreign currencies and electronic settlement.
- FIEs’ fair participation in government procurement projects should be guaranteed. Qualified Chinese employees of FIEs can apply to join the expert panel of government procurement evaluation.
- Qualified overseas high-end talents and talents in short supply in the Guangdong-Hong Kong-Macao Greater Bay Area can enjoy preferential measures in entry/exit administration and stay /residence in China.
- Foreign high-end talents introduced by FIEs will not be restricted in age, education background, and work experience. Foreign nationals applying for a work permit in a scientific or technological occupation will benefit from a relaxed limit on age, educational background, and work experience.
China is committed to creating a better environment for the growth of technology SMEs
China plans to increase the number of technology-based SMEs by 200,000 by the end of the “14th Five-Year Plan” and enhance their R&D capacity.
China’s Ministry of Science and Technology recently issued a notice on creating a better environment to support the R&D of technology-based SMEs.
The notice encourages technology SMEs to introduce international talents, in particular:
- The hiring of high-end foreign experts is encouraged.
- The work permit application procedures for high-end foreign talents will be streamlined. Their dependents’ visa applications and children’s enrollment in schools will also be facilitated.
- Foreign experts are encouraged to participate in various foreign expert projects.
- Foreign scientists working in the technology SMEs with permanent residence status can take the lead in scientific and technological projects in China.
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