China
May 2024 Monthly Tax Update for China
The People’s Bank of China and the State Administration for Market Regulation have issued the Administrative Measures on Beneficial Owner Information to enhance market transparency and prevent money laundering. Entities must record beneficial ownership information through registration systems by November 1, 2024. There are exemptions for certain entities. This system aims to improve business environment and prevent irregularities.
The People’s Bank of China (PBOC) and the State Administration for Market Regulation (SAMR) have jointly issued the Administrative Measures on Beneficial Owner Information (hereinafter referred to as the “Measures”), which will take effect from November 1, 2024.
These measures are designed to enhance market transparency, maintain market and financial order, and prevent money laundering and terrorist financing activities.
The Measures require entities other than individually owned businesses, including companies, partnerships, and foreign company branches, to record beneficial ownership information through relevant registration systems after November 1, 2024. Enterprises registered before November 1, 2024, have a one-year grace period, meaning they must complete beneficial ownership information filings before November 1, 2025.
Additionally, for registered entities with a registered capital not exceeding RMB 10 million (or its equivalent in foreign currency) and where all shareholders or partners are natural persons, there is an exemption. If there are no natural persons other than shareholders or partners exercising actual control over the entity or benefiting from it through means other than equity or partnership interests, these eligible entities can read and confirm a commitment letter in the system to be exempted from further reporting of beneficial ownership information.
It’s important to note that there may be more than one natural person considered a beneficial owner and any natural person meeting the criteria should be filed as a beneficial owner. If none of the criteria can identify a beneficial owner, the person responsible for daily management should be treated as the beneficial owner.
As a significant measure to optimize the business environment in China, the establishment of the beneficial ownership information filing system will enhance information symmetry and mutual trust among business entities, improve transaction security and efficiency, and help prevent irregularities such as shell companies, false capital injections, and nested shareholding. This system aligns with established international practices.
This article is republished from China Briefing. Read the rest of the original article.
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Business
China Telecom Gulf Officially Launches Operations in Saudi Arabia for Business Expansion
China Telecom Gulf was launched in Riyadh, enhancing digital cooperation between China and Saudi Arabia under the “Belt and Road Initiative,” with a focus on technological innovation and infrastructure development.
China Telecom Gulf Launches in Riyadh
On November 21, 2024, China Telecom Gulf was officially inaugurated in Riyadh, symbolizing a significant advancement in China Telecom’s internationalization efforts and commitment to the "Belt and Road Initiative." The event was attended by over 100 dignitaries, including Mr. Liu Guiqing, Executive Director of China Telecom Corporation, and Mr. Fawaz from the Industrial and Commercial Bank of China Riyadh Branch, marking a milestone in fostering a shared future between China and Arab nations.
Commitment to Digital Transformation
In his speech, Mr. Liu highlighted China Telecom’s dedication to collaborating with Saudi enterprises and local governments to enhance digital infrastructure. By leveraging its expertise in technologies like 5G and artificial intelligence, the company aims to provide high-quality communication services, thereby driving socio-economic growth in the region.
Strategic Partnerships for Growth
During the launch, China Telecom Gulf signed strategic agreements with several prominent companies, including Saudi Telecom Company and Huawei. These collaborations are geared towards optimizing digital experiences for Saudi customers and contributing to the broader Sino-Saudi cooperation in technology and economic development, solidifying China Telecom’s role in the Middle Eastern telecom landscape.
Source : China Telecom Gulf Officially Launches in Saudi Arabia for Business
China
India Initiates a Shift in Security Focus Regarding China Amid Economic Ambitions
Since 2014, India’s Modi government aimed to boost manufacturing through the Make-in-India campaign. However, tensions with China led to increased scrutiny of Chinese investments post-COVID-19, limiting their influence.
Modi’s Manufacturing Push
Since Narendra Modi took office in 2014, his administration has focused on boosting the manufacturing sector’s contribution to India’s GDP. The launch of the Make-in-India campaign aimed to enhance manufacturing capabilities and attract foreign direct investment (FDI), even in sensitive sectors such as defense and railways, thereby fostering economic growth.
Shift in Economic Relations
During this period, Chinese companies like Oppo and ZTE sought to capitalize on India’s manufacturing potential. However, the 2020 COVID-19 pandemic highlighted the need for safeguard measures against potential foreign takeovers. In response, India revised its FDI policy to increase scrutiny on investments from neighboring countries, particularly targeting Chinese investments, which now require governmental approval.
Geopolitical Tensions and FDI Impact
Tensions escalated after the June 2020 Galwan clash, severely straining Indo-China relations. This ongoing border standoff has posed challenges to the evolving dynamics between the two nations. As a result of these geopolitical tensions and pandemic-era policies, Chinese capital inflow to India constituted merely 0.43% of the total FDI from April 2000 to December 2021, highlighting a significant downturn in bilateral economic ties.
Source : India begins a rebalance of security concerns over China and economic aspirations
Business
BRICS: China Classifies Crypto as Property and Prohibits Business Ownership
China’s Shanghai court ruled cryptocurrencies are property, boosting optimism in the crypto industry while maintaining a ban on business transactions. This may signal a shift in future regulations.
China’s Ruling on Cryptocurrency
In a pivotal decision for the nation and its BRICS alliance, China has officially classified cryptocurrency as property while maintaining prohibitions against business transactions involving digital assets. A notable ruling from the Shanghai Songjiant People’s Court affirmed cryptocurrencies as property, sparking optimism within the crypto industry regarding future regulations.
Implications for the Crypto Industry
As cryptocurrencies gain significance globally, the Chinese ruling is viewed as a potential-positive shift amidst ongoing restrictions. While individuals can hold virtual currency, businesses remain barred from engaging in investment transactions or issuing tokens independently. This decision has generated anticipation for more accommodating regulations in the future.
Future Prospects for Cryptocurrency in China
Experts like Max Keiser believe this ruling indicates China’s growing acknowledgment of Bitcoin’s influence. As BRICS nations explore increased cryptocurrency utilization in trade, this legal shift could enhance market demand and lead to greater acceptance of cryptocurrencies as a legitimate asset class, setting the stage for potential developments in 2025.
Source : BRICS: China Rules Crypto as Property, Bars Business Holdings
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