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Enquiry: What are the tax obligations relating to the profits and other income streams accruing to the overseas partner of a foreign-invested enterprise operating in China?

Under normal circumstances, when a foreign investor remits any dividends and/or interest out of China, a 10% withholding income tax is levied. Overseas investors meeting the following criteria, however, may be entitled to pay tax at a lower rate or be exempt from the withholding tax:
  • Foreign investors who are residents of a country or region (such as Hong Kong) that is party to a bilateral tax agreement with the Chinese mainland*
  • Foreign investors whose investment projects fall within one of the priority categories designated by the mainland government*

* subject to relevant provision(s)

For further details, please refer to the following link:

Provisional Exemption from Withholding Tax

Content provided by Picture: HKTDC Research
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