New financial reporting requirements for China

1404_ChinaA new PRC Circular 642 will require PRC residents – measures which also affect individuals residing in the country for more than a year and corporations registered in China to report their foreign financial assets and liabilities as well as cross border transactions. The Circular was issued on 9 November 2013, and takes effect on 1 January 2014.
The State Administration for Foreign Exchange (SAFE) announced (in Circular 642) the revised ‘Measures for the Reporting of Statistics on International Receipts and Payments’ (国际收支统计申报办法), which were first published in 1995.

The reporting obligations apply to PRC residents, including foreign persons within the PRC. Generally, a PRC resident for this purpose includes

  • an individual who has resided in the PRC for more than one year
  • a PRC citizen who has been absent from the PRC for less than one year (but students studying abroad remain liable to report even after one year)
  • an enterprise incorporated in the PRC
  • a representative office or branch of a foreign corporation (including banks)
  • a non-resident who conducts economic transactions within the PRC

These reporting requirements previously applied to the following financial organizations: (a) Securities Dealers/Securities Registration Institutions; (b) Futures and Options Dealers; (c) Various Financial Institutions. Now an extra category has been added: institutions based in China that provide registration, clearing, and custodial services. This category may include funds companies, domestic trust companies and others.

Financial institutions are specifically targeted under this new regulation. Also, persons who conduct registration, clearing and custodian services, and dealers in securities and futures, must declare their agency transactions.

PRC residents will need to report to the State Administration of Foreign Exchange (“SAFE”) details of

  • foreign financial assets and liabilities
  • economic transactions conducted with non-PRC residents, either directly or through financial institutions

Failure to comply with these reporting obligation will result in fines of up to RMB300,000 for corporations and RMB50,000 for individuals.

Many residents may be concerned about how the data collected under this new law will be used. In the amended requirements, it states that relevant departments (and state employees) will be required to maintain data confidentiality. This will not only be limited to the personnel participating in the collection of statistics relating to ‘international receipts and payments’, but will also apply to service providers and departments in the entire value chain, such as bank staff. The data will only be used strictly for the purposes of statistical analysis of ‘international receipts and payments’ for the benefit of the State. It remains unclear whether the collected data will be shared with other Departments (such as the tax administration) at a later stage.

There is general belief in China that the new measures are intended to prevent or discourage the offshoring of assets. On 29 December 2013, the Central Committee of the Communist Party of China issued the ‘Announcement on becoming a better Leader/Official by reporting personal relevant matters’ or 《关于进一步做好领导干部报告个人有关事项工作的通知》. This will restrict appointments and promotion opportunities for leaders, officials, and state employees in cases where individuals do not accurately report their income, properties, and spouse’s or children’s immigration status etc.

These measures could also be a prelude to China’s move to increase taxes on foreign assets at some point in the future. Some fear this could become a push factor that would encourage wealthy and better-educated Chinese to consider immigration away from the PRC.




  • 中国に1年以上居住している個人
  • 海外に移住した者の内、中国を離れて1年未満の個人(ただし海外の中国人留学生は、中国を離れている年数に関係なく報告義務がある)
  • 中国法人
  • 外国籍法人における中国での駐在事務所や支店・支行(銀行を含む)
  • 中国非居住者であるが、中国にて経済活動を行う者

以前の報告義務対象は以下における金融機関のみでした;(a) 証券取引会社やブローカー、(b) 投資信託会社やブローカー、(c) その他の金融機関。今回は中国において登記代行業務会社、先物取引会社、信託管理会社も新たに対象に加わりました。



  • 海外にある資産とその負債・債務
  • 中国非居住者による直接または金融機関を通した経済取引