China Clarifies Issues Concerning FIE’s Annual Reporting on Foreign Exchange Operations

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SHANGHAI – The General Affairs Department of the State Administration of Foreign Exchange (SAFE) recently released the “Circular on Issues Concerning Foreign-invested Enterprise’s (FIE) Annual Reporting on Foreign Exchange Operations in 2014 (Hui Zong Fa [2014] No.58).”

According to the Circular, if the sole foreign-investor of an FIE is a domestic investment company, it will be exempt from the annual foreign exchange report; FIEs jointly funded by domestic investment companies and foreign investors should report their foreign exchange operations to the SAFE bureaus where the FIEs are located via the Capital Account Information System.

The documents required for the 2014 annual foreign exchange report include:

  • Enterprise’s basic information form;
  • The balance sheet for 2013;
  • The profit statement for 2013; and
  • The statistical table of foreign parties’ rights and interests in 2013 (excluding the rights and interests of the domestic investment companies).

In this year’s annual reporting, an amendment has been made to the content of the statistical table of foreign parties’ rights and interests – FIEs will no longer need to provide data on remitted profits and newly-increased guarantee amounts for offshore guarantees, but will be required to provide data on the legal rights and interests of investment FIEs in its domestic subsidiaries .

FIEs can complete the declaration on their own or entrust accounting firms, banks and local branches of SAFE to do so. FIEs are not required to submit hard copies of the report documents.

The declaration period began on May 12, 2014 and will last until August 31, 2014.

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