China’s Regulatory Compliance Checklist: A Guide for Foreign-Invested Enterprises

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As a foreign-invested enterprise in China, it is crucial to comply with the country’s regulatory requirements to avoid penalties, blacklisting, or even business license revocation. The annual compliance cycle typically runs from January to June, and failure to complete these steps on time can have severe consequences.

Annual Compliance Requirements

The three main steps of annual compliance requirements are:

1. Statutory Annual Audit

• Hire a certified public accounting firm registered in China to conduct an audit of the company’s financial reports.
• The audit report is essential for ensuring that the company’s financial statements conform to Chinese GAAP standards and provide a true reflection of its financial position.

2. Annual Tax Filing

• File annual corporate income tax (CIT) returns with the local tax authority.
• CIT is paid on a quarterly basis during the year, and the annual reconciliation ensures that the tax has been fully paid or if additional tax needs to be paid or refunded.

3. Annual Reporting Procedure

• Submit information to various government authorities, including:
  • MOFCOM
  • SAMR
  • SAFE
  • Finance Authority
  • Customs Authority (for trading companies)
• This ensures that companies are compliant with regulations and keeps their information updated.

Additional Requirements for Representative Offices (ROs)

• ROs must pass an annual inspection by submitting a notarised and legalised business certificate of the foreign entity to SAMR every year.
• Plan this activity well in advance to avoid any delays in preparation and submission of required documentation.

Hawksford: Your Partner in Compliance

Hawksford is an established provider of company incorporation and outsourced corporate services in China. Our services include:

• Audit support
• Coordination between auditors and clients
• Assistance with recurring tax compliance services, annual corporate income tax filing, and annual reporting

By outsourcing these tasks to Hawksford, foreign-invested enterprises can ensure compliance with Chinese regulatory requirements while minimizing the risk of penalties or other consequences.