Insights

New Public Annual Reporting Obligation for Foreign-Invested Enterprises in China

Further to the announcements that have been coming from the National People’s Conference this week regarding the reorganisation of the Chinese central government, a new annual report obligation has been announced on 12 March by joint decree of the Ministry of Commerce, Ministry of Finance, the State Administration of Taxation, the Administration of Quality Safety Inspection and Quarantine, the Foreign Exchange Bureau and the Statistics Bureau.  This Decree imposes an obligation on all foreign-invested enterprises in China to prepare an annual investment and management report (“Joint Annual Report”).  This Joint Annual Report will be shared amongst the government agencies that issued the notice as well as the general public.

Foreign-invested enterprises already established must submit their first annual reports, based on 2017 investment and management information, by 30 June 2018.  Enterprises established in 2018, will submit their first report next year based on 2018 investment and management information.  The reports are to be prepared and submitted online at http://www.lhnb.gov.cn ). Companies submitting their Joint Annual Reports will be listed publicly and certain information contained in the reports will be made available to the public in accordance with Interim Regulations on Corporate Information Disclosure (State Council Decree No. 654).  It is anticipated that the public will be able to access this information through a Joint Reporting Information Publicity Platform” which will be available at http://lhnbgs.mofcom.gov.cn.

With respect to the details of the Joint Annual Report and those elements that will be publicly available, we are not yet clear.  Once this information has been confirmed I will be sure to share that with my clients immediately.