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By Vincent Cheung from www.pathtochina.com

According to the law on foreign invested enterprises’ corporate income tax, foreign investors  who increase the registered capital by directly investing their companies’ profits in their companies, or set up other foreign invested companies with the profits,  can apply to the tax bureau for tax refund of 40% of the part of corporate income tax they’ve paid equal to the reinvested capital. A total tax refund will be offered to those foreign investors which are reinvesting their profits in extending their goods export enterprises or high-tech enterprises. Starting from the re-injection of the registered capital, their companies should at least be on operation for more than 5 years, or the tax bureau will ask you to return all of the tax refund. If the profits reinvested have been repatriated out of china , deposited in foreign banks, or used as trading capital, this tax refund policy is not applicable.  

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 “Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business registration service , please contact Vincent by vincent@pathtochina.com.