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	CIRCULAR ON ISSUES CONCERNING OUTWARD REMITTANCE OF PROFIT, STOCK DIVIDENDS AND STOCK BONUSES PROCESSED BY DESIGNATED FOREIGN EXCHANGE BANKS

	(Promulgated by State Administration of Foreign Exchange on September 22, 1998)


SUBJECT : OUTWARD REMITTANCE OF PROFIT, STOCK DIVIDENDS AND STOCK BONUSES PROCESSED
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 09/22/1998
IMPLEMENT DATE : 09/22/1998
LENGTH : 485 words
TEXT :

To further normalize foreign exchange administration of the outward remittance of profits, stock dividends or stock bonuses by foreign-funded enterprises (FFEs) or by enterprises issuing stock abroad, and to perfect foreign exchange administration of current accounts, we hereby issue a circular on relevant issues as follows for implementation:

1. Foreign investors of FFEs and enterprises issuing stock abroad, for remitting profits, stock dividends or stock bonuses of the current year abroad, shall present following documents to the designated foreign exchange banks (hereinafter Banks):

(1) Tax-paid certificate and taxation declaration form (for enterprises enjoying tax reduction or exemption, certificate of tax reduction or exemption issued by domiciled taxation administration agency shall be provided);

(2) Auditing Report of the current year issued by CPA;

(3) The board of directors' resolution on the distribution of profits, stock dividends or stock bonuses;

(4) Foreign Exchange Registration Certificate of FFEs;

(5) Capital Assessment Report issued by CPA; and

(6) Other documents required by SAFE.

2. Foreign investors of FFEs and enterprises issuing stock abroad, for remitting of previous year abroad, shall present auditing report issued by CPA in addition to documents prescribed in Article 1. The auditing report is on concerned years when the profits, stock dividends or stock bonuses come into being.

3. Banks shall examine the authenticity of above-mentioned documents. After verifying the documents bona fide, Banks shall make a note of "profits, stock dividends or stock bonuses remitted" on and affix their seals to the Foreign Exchange Registration Certificate of FFEs and tax-paid certificate. Duplicate copy of the documents prescribed in Article 1 and 2 shall be kept for record after remittance.

4. Banks shall report to the domiciled branch of SAFE the statement of remitted profits, stock dividends or stock bonuses by FFEs and enterprises issuing stock abroad in previous month within the first 5 working days of each month. The SAFE have the right to spot check outward remittance of or more than US$100,000 equivalent (including US$100,000), and questionable ones to verify the authenticity of the profits. Spot check rate shall not be lower than 50% of reported remittance. Banks found not verifying the remittance as required and enterprises found remitting false profits shall be penalized according to relevant regulations.

5. Neither FFE whose registered capital has not been fully paid in as provided by the articles of contracts nor enterprise issuing stock abroad whose foreign exchange funds raised by the issuance of stock have not been fully repatriate without approval is allowed to remit profits, stock dividends or stock bonuses abroad.

On receipt of this Circular, SAFE branches are requested to transmit it expeditiously to their sub-branches, financial institutions (including foreign-funded financial institutions), and to relevant organizations. Chinese-funded designated foreign exchange banks are requested to transmit it to their branches. If problems arise during implementation, it is requested that they be reported to SAFE in timely fashion.

This Circular shall come into effect on receipt.