How the profit repatriation from China
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How the profit repatriation from China, most investors pay attention to this point. Preparing in advance can substantially increase the likelihood of success and avoid corresponding risks.
In general ,China company can remit funds as dividends. When company has undergone annual audit and tax compliance process ,then repatriate the profit.
Annual audit for tax compliance in China involves producing a statutory annual audit report, a Corporate Income Tax (CIT) reconciliation report, and reporting to relevant government bureaus.This process allows tax authorities to make sure all CIT has been paid up with regard to the profits being distributed.The tax authorities will also confirm the maximum profit amount that can be repatriated based on the net profit indicated in the financial reports.The shareholders can decide how much profit and when remit the profit through a profit distribution plan draft. And the profit distribution resolution should be reached prior to the special audit.Overseas shareholders, who are tax residents of a country that has an effective double tax avoidance agreements (DTA) with China, can submit corresponding documents to the tax bureau in charge in order to enjoy the DTA benefits. The FIE can remit a dividend in the bank by submitting its related proofs.
One way is through the intercompany service fees. For service fees, besides the beneficial owner assessment, the company needs to make sure the services are provided within a certain period.The bank will remit the service fees with the Service contract and the invoices issue by the service provider, the payment notice, or the other documents that can prove the rationality and authenticity of the transaction.
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