In April 2024, the People’s Bank of China (PBOC), together with the State Administration for Market Regulation (SAMR), issued the Measures for the Administration of Beneficial Owner Information (the “Administrative Measures”) (see JunHe Client Briefing: Key Points of the Measures for the Administration of Beneficial Owner Information). The Administrative Measures came into effect and were implemented on November 1, 2024.
From November 1, 2024, all companies, partnerships, and branches of foreign companies established in the People’s Republic of China (PRC) are required to register their beneficial owner information (“BOI”) when completing their initial establishment registration. For entities registered before November 1, 2024, their BOI must be submitted by November 1, 2025, in accordance with the Administrative Measures.
On October 28, 2024, the PBOC’s Anti-money Laundering Bureau issued the Guidelines for the Filing of Beneficial Owner Information (First Edition) (the “Guidelines”). These Guidelines are in a Q&A format to address common questions related to BOI filings and clarify several requirements. Below is a summary of the key points under the Administrative Measures and Guidelines.
Filing Entity
All companies, partnerships, and branches of foreign companies established within the PRC (hereinafter referred to as the “Filing Entity”) are required to make BOI filings. To reduce the filing burden on small and medium-sized enterprises (SMEs) with relatively simple shareholding or partnership structures, the Administrative Measures allow filing entities that meet the following conditions to be exempted from BOI filings upon an online submission of a written declaration: (1) the registered capital (or contribution amount) does not exceed RMB 10 million (or equivalent foreign currency); (2) all shareholders or partners are natural persons; (3) no individuals other than shareholders or partners exercise actual control or derive benefits from the entity; and (4) no control or benefit is derived through means other than equity or partnership interests.
Standards for Identifying Beneficial Owners
According to the Administrative Measures, a beneficial owner refers to a natural person who ultimately owns or has ultimate effective control over a Filing Entity, or who ultimately benefits from the Filing Entity. Beneficial owners must be natural persons and have the following criteria:
Criterion A: Have 25% or more direct or indirect ownership of the equity interest, shares, or partnership interests of a Filing Entity.
Criterion B: If Criterion A is not met, they must have 25% or more of the ultimate entitlement to the gains or voting rights of a Filing Entity.
Criterion C: If Criterion A is not met, they must individually or jointly exercise ultimate effective control over a Filing Entity.
A Filing Entity must apply the three identification criteria listed above to identify all beneficial owners and file their information. If more than one natural person meets any of the above criteria, all such natural persons should be filed as beneficial owners. If there is no natural person meeting any of the above criteria, the person responsible for the day-to-day operation and management of the Filing Entity should be filed as the beneficial owner.
The Guidelines also provide illustrative examples for applying the identification criteria, offering guidance for entities with complex equity or partnership structures.1 For example, when a natural person indirectly owns 25% or more of the equity (or partnership interests) through multi-tiered holding structures, the entity must trace back through each level of the equity (or partnership interests) structure to calculate the natural person’s ultimate ownership. Both nominal and aggregated beneficial ownership that reach 25% or more must be filed.
Special Filing Entity
State-controlled or state-participated enterprises: Wholly state-owned or state-controlled enterprises may designate their legal representative as the beneficial owner for filing purposes. The filing system provides specific options for these entities. For state-participated (i.e., not majority-owned but minority-owned by state capital) enterprises, non-state-owned portions must comply with the Standards for Identifying Beneficial Owners mentioned above, while state-owned capital portions are exempt from further identification.
Branches of foreign companies: Branches of foreign companies registered under the Regulations on the Administration of Market Entities Registration must make BOI filings. In addition to filing information on the foreign company’s beneficial owners as per Article 6 of the Administrative Measures and Section III of the Guidelines, at least one senior management personnel at the branch level (e.g., the person-in-charge of the branch) must be identified and filed as a beneficial owner.
Information to Be Filed
Filing Entities should provide the beneficial owner’s name, gender, nationality, date of birth, habitual residence or office address, contact information, the type, number, and validity period of their identification document or identity proof, and the type, formation date, and termination date (if any) of the beneficial ownership relationship for BOI filings. In addition, the percentage of equity holdings, shareholdings, or partnership interest holdings should be reported for beneficial owners identified under the above Criterion A; the percentage of entitlement to the gains and voting rights should be reported for beneficial owners identified under the above Criterion B; and the method of exercising ultimate effective control should be reported for beneficial owners identified under the above Criterion C. Taking Shanghai as an example, the Shanghai Enterprise Registration System has launched an online service for BOI filings.2
Pursuant to the Administrative Measures, the BOI filing is non-public and is only accessible to relevant state authorities and anti-money laundering obligated institutions in the course of performing their statutory duties through inquiries to the PBOC.
Consequences of Failing to File or Filing False Information
A Filing Entity that fails to make BOI filings as required or files false information will be handled in accordance with the relevant administrative regulations on enterprise registration management. According to Article 73 of the Detailed Implementation Rules of the Regulations on the Administration of Market Entities Registration, entities that fail to comply with the filing requirements will be ordered by the registration authority to rectify the issue. Those who refuse to comply face fines of up to RMB 50,000.
Based on our experience, failure to make BOI filings in a timely manner may affect an entity’s ability to handle bank account-related procedures. For instance, when modifying bank account information, banks may require account holders to complete the BOI filing in advance.
Alignment with PBOC’s Other BOI Regulations
The Guidelines also clarify the relationship between the Administrative Measures and previous documents issued by the PBOC regarding beneficial ownership, emphasizing that they apply to different contexts:
1. The Administrative Measures primarily establish specific requirements for entities to proactively file a BOI. The identification standards for beneficial owners specified in the Administrative Measures are based on international best practices and China’s regulatory framework, further refining the existing anti-money laundering regulations. These standards will be uniformly adopted in the forthcoming revisions of anti-money laundering laws and regulations.
2. Previous documents issued by the PBOC related to BOI require financial institutions to identify the beneficial owners of non-natural person clients as part of their customer due diligence obligations for anti-money laundering and counter-terrorism financing purposes.
Even after entities complete the BOI filings process under the Administrative Measures, financial institutions must still conduct their own identification of beneficial owners as part of their compliance obligations.
1. For more details, please refer to http://www.pbc.gov.cn/fanxiqianju/135153/135173/5489085/index.html.
2. See https://yct.sh.gov.cn/portal_yct/.
