A recent Circular, No. 642, will require Chinese residents to report their foreign financial assets and liabilities, as well as cross-border transactions. The circular was issued on 9 November 2013, and takes effect on 1 January 2014.
Who is liable to report?
The reporting obligations apply to Chinese residents, including foreign persons within the PRC.
Generally, a resident for this purpose includes:
- an individual who has resided in the PRC for more than one year;
- a PRC citizen who has been absent from China for less than one year (however, students studying abroad remain liable to report even after one year);
- an enterprise incorporated in China;
- a representative office or branch of a foreign corporation (including banks);
- a non-resident who conducts economic transactions within China.
Financial institutions are specifically targeted under the circular. Also, persons who conduct registration, clearing and custodian services, and dealers in securities and futures, must declare their agency transactions.