How to Repatriate Profits from China - Preview

2 Introduction SABRINA ZHANG Partner Dezan Shira & Associates Repatriating profits fromChina has long been a complicated and challenging issue for foreign businesses with subsidiaries in the country. China has a notoriously strict system of foreign exchange controls, which tightly restrict the flowof capital into and out of theMiddle Kingdom – creating a headache for foreign investors looking to remit profits overseas. Upon its ascension to the World Trade Organization in 2001, China pledged to liberalize its foreign exchange market. However, to the frustration of many foreign businesses, these changes have been slow to materialize. As such, foreign businesses in China must deal with the reality of the complicated processes that must be completed in order to repatriate profits overseas. Nevertheless, while China’s foreign exchange rules are restrictive, investors can choose from different profit repatriation channels based on their unique needs and the structures of their businesses. In this edition of China Briefing magazine, we offer foreign investors a guide to managing this process. We begin by presenting an overview of the most common profits repatriationmethods used in China, and go over the pros and cons of each method. We then navigate the complex and extensive compliance procedures required for outbound payments. Finally, we analyze how businesses can leverage double taxation avoidance agreements tomaximize their take-home profits. This magazine is based on Dezan Shira & Associates’extensive experience in facilitating and optimizing cross-border transactions. With kind regards, Sabrina Zhang Credits Publisher / Sabrina Zhang Managing Editor / Adam Pitman Editor / Qian Zhou Contributors / Ines Liu, Hannah Feng Design / Belén Rodríguez Reference China Briefing and related titles are produced by Asia Briefing Ltd., a wholly owned subsidiary of Dezan Shira Group. Content is provided by Dezan Shira & Associates. No liability may be accepted for any of the contents of this publication. Readers are strongly advised to seek professional advice when actively looking to implement suggestions made within this publication. For queries regarding the content of this magazine, please contact: editor@asiabriefing.com All materials and contents © 2018 Asia Briefing Ltd. Asia Briefing Ltd. Unit 507, 5/F, Chinachem Golden Plaza, 77 Mody Road, Tsim Sha Tsui East Kowloon, Hong Kong. www.asiabriefing.com www.dezshira.com www.aseanbriefing.com www.india-briefing.com www.indonesiabriefing.com www.vietnam-briefing.com www.china-briefing.com

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