Q:
|
Is it compulsory to disclose the ultimate actual controller when applying for the establishment of a foreign invested enterprise in China?
|
|
A:
|
Yes. It is compulsory to report and disclose the ultimate actual controller when applying for the establishment of a foreign invested enterprise in China.
|
Q:
|
Does the ultimate controller have to be traced to a nature person?
|
A:
|
Generally, the ultimate controller must be traced to a nature person unless the investor is a listed company, government or public institution, state-owned or collective enterprise.
|
Q:
|
How the actual control operates?
|
A:
|
The ways of actual control include:
1.
|
directly or indirectly holding 50% or more of the shares, equity, property shares, voting rights or similar rights and interests in the enterprise.
|
|
2.
|
directly or indirectly holding less than 50% of the shares, equity, property shares, voting rights or similar rights and interests in the enterprise, but:
(1).
|
is entitled directly or indirectly to appoint at least half of the members of the enterprise’s board of directors or similar decision- making body;
|
|
(2).
|
can ensure that its nominated people can obtain at least half of the seats on the enterprise’s board of directors or similar decision- making body; or
|
|
(3).
|
the voting rights are enough to have a material impact on the resolutions of the enterprise’s shareholders meetings, general meetings, board of directors or similar decision-making bodies.
|
|
|
3.
|
having a decisive influence on the enterprise’s transactions, finance, personnel and technology, through contracts, trust or in other ways.
|
|
Q:
|
What will happen if the ultimate actual controller is not disclosed?
|
A:
|
The foreign invested enterprise will not be established if the ultimate actual controller has not been disclosed.
|
Q:
|
What should be done if there is a change for the ultimate actual controller?
|
A:
|
The foreign invested enterprise shall submit an amendment report to the local competent commerce bureau within 20 working days after the change of the ultimate actual controller occurs.
|
SOALAN LAZIM
