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Article China: Rules on Filing of Beneficial Ownership Information Issued

On April 29, 2024, the People’s Bank of China (PBOC) and the State Administration for Market Regulation (SAMR) jointly issued the Administrative Measures for Beneficial Ownership Information. Taking effect on November 1, 2024, the measures will require “filing entities”—companies, partnership enterprises, branches of foreign companies, and “other entities specified by the PBOC and SAMR”—to file beneficial ownership information through the registration system established by the authorities. (Art. 2.)

A beneficial owner refers to a natural person who ultimately owns or exercises actual control over a filing entity, or who enjoys the ultimate benefits of a filing entity. (Art. 15.) A natural person is the beneficial owner of the filing entity if the person:

    • ultimately owns, directly or indirectly, 25% percent or more of the equity, shares or partnership interests of the filing entity;
    • ultimately holds 25% percent or more of the profit rights or voting rights of the filing entity; or
    • exercises actual control over the filing entity, either alone or jointly with others. (Art. 6.)

Beneficial owners of branches of foreign companies also include the senior executive of the branch. The measures further state that the exemption criteria for beneficial ownership reporting enjoyed by a foreign company in its home country are not applicable in China. (Art. 8.)

The measures exempt filing entities with registered capital not exceeding 10 million Chinese yuan (about US$1.39 million) and whose shareholders or partners are all natural persons from filing beneficial ownership information, provided the filing entity commits that there is no other natural person exercising actual control over it, receiving benefits from it, or controlling or obtaining income from it through means other than equity or partnership interests. (Art. 3.)

The beneficial ownership information to be filed includes the name, gender, nationality, date of birth, address of habitual residence or the employer’s address, contact information, identity document information (type, number, and validity period), and type of beneficial ownership (including dates when the ownership is formed and terminated, if applicable). Wherever applicable, the beneficial owner’s proportion of equity, shares, or partnership interests, proportion of profit rights or voting rights, or means of actual control must also be reported. (Art. 11.)

Under the measures, any relevant state authorities may by law obtain an entity’s beneficial ownership information from the PBOC, if the information is needed to perform their official duties. Financial institutions and specified non-financial institutions, when fulfilling their anti-money laundering and counter-terrorist financing obligations, may also obtain beneficial ownership information through the PBOC. Such authorities, financial institutions, and specified non-financial institutions are required by the measures to maintain the confidentiality of all such information. (Art. 12.)

The measures were prepared in accordance with laws and regulations on anti-money laundering and enterprise registration administration. They are intended to enhance market transparency, maintain market and financial order, and curb money laundering and terrorist financing activities. (Art. 1.)

Laney Zhang, Law Library of Congress
May 22, 2024

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Chicago citation style:

Zhang, Laney. China: Rules on Filing of Beneficial Ownership Information Issued. 2024. Web Page. https://www.loc.gov/item/global-legal-monitor/2024-05-21/china-rules-on-filing-of-beneficial-ownership-information-issued/.

APA citation style:

Zhang, L. (2024) China: Rules on Filing of Beneficial Ownership Information Issued. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2024-05-21/china-rules-on-filing-of-beneficial-ownership-information-issued/.

MLA citation style:

Zhang, Laney. China: Rules on Filing of Beneficial Ownership Information Issued. 2024. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2024-05-21/china-rules-on-filing-of-beneficial-ownership-information-issued/>.