NEW POLICY | Foreign enterprises cannot miss

The FDI Inventory Rights Registration (IRR) of Foreign-invested enterprises has been replaced by Joint Annual Report (JAR), which has to be finished BEFORE 6.30. It is less than 1 month before the deadline! Companies who do not submit the report accordingly would be regulated and penalized by the Foreign Exchange Bureau (FEB). What we should emphasize here is that some companies do not know the existence of the IRR and JAR or somehow managed to ignore them completely. For example,some domestic enterprises did not continue the business after setting asubsidiary company, which resulted in it being regulated and put into the ‘blacklist’.There is no doubt that they will be regulated and penalized. Regardless of whether they operate domestic business or not, foreign investors should always submit their registration and report before the deadline. Anyway, all the foreign investors who have once registered ODI, FDI or Return Investment should submit the IRR every year! 

 

 

 

 


 

1. Company business will be regulated if you do notsubmit your report before deadline. Banks should be careful not to take the blame. 

Enterprises who did not submit their IRR accordingly would be set as ‘Business Under Regulation’ in the Capital Account Information System of FEB. Banks always check if one enterprise is under the business regulation when they are going to apply services. Those who did not submit their registration accordingly or even miss it will be refused by banks when they want to do foreign exchange business. 

 

2. The consequence of missing the deadline of JAR wouldbe: 

1) Domestic Direct Investment

FEB in the place where Foreign-invested Enterprises registered is responsible for spot check of report submission. For those who conceal the truth and lie, FEB will stop their business through regulation in the Capital Account Information System under relevant procedures. Banks should check if one enterprise has submitted the JAR and if it is under the business regulation. If not, it will be refused by banks when they want to apply for foreign exchange business. 

2) Capital settlement of exchange involvedin Domestic Direct Investment

Banks can not give capital settlement of exchange service to those who did not submit their report accordingly. And the capital funds which are not recorded in the Domestic Direct Investment Currency Registration may not be exchanged, transferred or paid. 

3) Profit exchange of Domestic Direct Investment (DDI)

Enterprises who did not submit their report accordingly cannot apply for profit exchange. 

 

3. What is JAR? 

JAR: relevant departments made anannouncement jointly on 2018.03.12, requiring that legal-registered Foreign-Invested Enterprises in China should fill up its operation and management information from last year through: http://www.lhnb.gov.cn

These data will be shared and supervised among relevant government officials!

Deadline: 4.1 to 6.30

As for domestic enterprises, after putting their Foreign-invested on records, they should send their submission to related department, including Industrial and Commercial Annual Report of Domestic Enterprises, Foreign Direct Investment Exchange Inventory Rights Registration and Annual Reporton Foreign-invested by the Ministry of Commerce. 

 

* If you have any further questions, please feel free to contact our consultant. 
 

 

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