more-arw search

Q&A Forum

Is there a holding requirement before dividends may be pulled from China - even if taxable? (Webinar Attendee Question)

The following question was asked by an attendee at a recent Proformative China M&A, Tax and Structure webinar: Is there a holding requirement before dividends may be pulled from China - even if taxable?  Does fact that we have not yet met our capital contribution requirement to our WFOE in China change that?

Answers

Jinghua Liu
Title: Special Counsel
Company: Baker & McKenzie
(Special Counsel, Baker & McKenzie) |

Before a Chinese company can make dividend distribution to its shareholders, the company should put 10% of its annual profit into a statutory reserve every year until the total amount of the reserve reaches 50% of the registered capital amount. If the registered capital has been paid in full according to the capital contribution schedule, the company can distribute dividend from its retained earnings

Mike Adhikari
Title: Owner
Company:
(Owner, ) |

Hi Jinghua Liu
I would appreciate some clarity. What is a "registered capital amount"? When is it not paid in full? What is "capital contribution schedule"?

2748 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.