In April 2024, the People's Bank of China (PBoC) and the State Administration of Market Regulation (SAMR) introduced the Rules to Administrate Beneficial Owner Information (BOI Rules). These rules mandate entities operating in China to file beneficial ownership information, ensuring compliance with transparency regulations. The BOI Rules, akin to the U.S. Corporate Transparency Act, apply to all eligible entities in China, whether privately owned, state-owned, or foreign-invested.
Implementation and Compliance Timeline
The BOI Rules officially came into effect on November 1, 2024. Entities must complete their BOI filings within the stipulated timeframe. Non-compliance or inaccurate filings may result in penalties imposed by both the PBoC and SAMR.
Who Needs to File?
All companies, partnerships, foreign company branches, and other entities designated by the PBoC and SAMR are required to file beneficial ownership information unless specifically exempted.
Exemptions
Small-sized entities may be exempt from BOI filing if they meet all the following conditions:
Registered capital does not exceed RMB 10 million (or equivalent in foreign currency).
Shareholders or partners are all natural persons.
Actual control or benefits belong solely to registered shareholders or partners.
Control or benefit rights are exercised only through equity or partnership interests.
Identifying Beneficial Owners
Entities must determine their beneficial owners based on specific conditions outlined in the BOI Rules. The identification process is structured as follows:
Conditions to Qualify as a Beneficial Owner
Ownership Threshold: A natural person directly or indirectly owns 25% or more of the entity's equity interest, shares, or partnership interest.
Income or Voting Rights: A natural person who does not meet Condition (1) but is entitled to 25% or more of the entity’s income or voting rights.
Control: A natural person, failing to meet Condition (1), exercises actual control over the entity either individually or in conjunction with others.
If none of the above conditions apply, the individual responsible for daily operations and management must be reported as the beneficial owner.
Required Information for BOI Filing
Once a beneficial owner is identified, entities must submit the following details:
Type of Information | Remark |
Name | Must match a valid identification document (e.g., passport). |
Gender | / |
Nationality | / |
Date of Birth | / |
Principal Place of Residence or Work Address | Format: Country/Region + Province + City + County (District) + Detailed Address. |
Contact Details | An 11-digit Chinese mobile phone number must be provided. |
Identification Document | Include the type (e.g., passport), number, and expiration date. |
Beneficial Ownership Details | Specify applicable conditions, period of ownership, including start and termination dates if applicable. |
Additional Information Based on Conditions Met
Applicable Condition | Additional Information |
Condition 1 | Percentage of the equity interest, shares, or partnership interest in the entity. |
Condition 2 | Percentage of the income or voting rights of the entity. |
Condition 3 | |
(i) Method of actual control, e.g., through an agreement, close relationship, or other means. | |
(ii) Actual control power, including: |
Appointment or dismissal of legal representatives, directors, supervisors, or executives.
Decision-making over significant business operations, management, or financial matters.
Long-term control over substantial assets or funds.
Filing Deadlines and Procedures
Deadlines
Entities established before November 1, 2024 must file BOI by November 1, 2025.
Entities established after November 1, 2024 must file BOI at the time of establishment.
Filing Process
The SAMR is responsible for collecting BOI filings. Entities can submit filings electronically through the local SAMR counterpart’s website following official guidelines.
Consequences of Non-Compliance
Entities failing to file on time or submitting incorrect or incomplete information may face penalties from both SAMR and PBoC:
SAMR may impose penalties similar to those applied for inaccurate entity registration filings.
PBoC may require corrective action within a specified timeframe. Failure to comply could result in fines of up to RMB 50,000.
The BOI Rules mark a significant step toward corporate transparency and financial compliance in China. Entities must take proactive measures to ensure accurate and timely filings, mitigating risks of penalties and non-compliance. Businesses should review their ownership structures and prepare for BOI submissions well before the deadlines.
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