China Beneficial Owner Information Filing in Practice
The Beneficial Owner Information (BOI) Filing Measures, issued by the People’s Bank of China (PBOC), in collaboration with the State Administration for Market Regulation (SAMR), was taken effect from November 1, 2024.
You can read our previous share to understand the main idea of the beneficial owner:
- What is a beneficial owner?
- How to determine the beneficial owner?
- What information about the UBO needs to be filed
- Timing
- Information protection
To provide further clarity, on October 28, 2024, the Anti-Money Laundering Bureau of the PBOC released the Guidelines for Beneficial Ownership Information Reporting (First Edition) (“the Guidelines”).
Since the effective date of the measures, under the new requirements, all companies, partnerships, and branches of foreign companies established in China, except individually owned companies, should report their beneficial ownership information at the time of registration via the relevant corporate registration system. For the companies already registered before November 1, 2024, they should complete their filings by November 1, 2025.
- Who is not required to file the BOI?
Considering that most of the shareholding structure of MSMEs is relatively simple, to reduce the burden of filling out the form for MSMEs, some can be exempted from filing the BOI after the commitment, but need to meet the following four conditions at the same time:
- The registered capital (capital contribution) does not exceed 10 million RMB (or equivalent to the foreign currency);
- The shareholders and partners are all natural persons;
- There is no natural person other than the shareholders or partners who control it or derive income from it;
- There is no situation of exercising control over it or obtaining income from it by means other than equity or partnership interests.
If the filing company meets the above conditions, it is exempted from filing the BOI and only needs to read the commitment letter and check the box to confirm in the administration system, which greatly simplifies the filing filling process and reduces the burden of MSMEs.
- Beneficiary owner vs. Actual controller
The concept of a beneficial owner shares similarities with the “actual controller” defined under China’s Company Law, but there are key differences.
First, the scope of a beneficial owner is broader. Beneficial ownership encompasses three key aspects: ownership, control, and benefit. A beneficial owner can be the owner, controller, or beneficiary of a company (or partnership), whereas an actual controller primarily refers to an entity or individual who exercises control.
Second, a beneficial owner must always be a natural person, whereas an actual controller can be either a legal entity or a natural person under Company Law. Identifying a beneficial owner requires a “look-through approach,” meaning ownership must be traced through multiple layers until the ultimate natural person who owns, controls, or benefits from the entity is identified.
This distinction is essential for compliance with China’s beneficial ownership reporting requirements and ensures transparency in corporate structures.
Our Observation
During the recent modification cases at the administration bureau, we found the system creating a new section regarding the BOI information. The BOI information should be filed. We believe soon this will become mandatory information to be inserted during any modification or establishment of a company.
To help companies navigate these new compliance obligations, we keep on sharing practical advice for the BOI filing. Stay tuned and if you have any questions, please contact us.
