Scope of application of the Measures
According to article 2 of the Administrative Measures for Beneficial Owner Information (the Administrative Measures or the Measures), companies, partnerships, and branches of foreign companies are currently the “record-filing subjects/entities” that should complete such filing.
Furthermore, article 3 of the Administrative Measures provides for conditional exemptions for entities with a smaller scale and a simple equity/partnership structure. For an entity with a registered capital of less than RMB 10 million and whose shareholders and partners are all natural persons, if there is no natural person other than a shareholder or partner who actually controls it or obtains profits or benefits from it, and there is no situation where control is exercised over it or profits or benefits are obtained from it by means other than equity or partnership interests, the entity can be exempted from filing the beneficial owner information after making a commitment.
What are the key requirements for the record-filing?
Required information/documents to be disclosed
The record-filing information to be disclosed and provided through the relevant Administration for Market Regulation system includes the specific detailed information of the beneficial owner (name, gender, country, identity type, certificate number, certificate validity period, date of birth, mobile phone number, work address or residential address, type of beneficial ownership relationship). Kindly note that beneficial owner record-filings are not within our scope of work stated in the engagement letters.
Identification standards of beneficial owner(s)
According to the Answers to the Journalists' Questions on the Beneficial Owner Information Administrative Measures on April 30, 2024, the beneficial owner refers to the natural person who ultimately owns or actually controls the filing subject, or enjoys the final benefits/profits of the filing subject.
Further, article 6 of the Measures also provides detailed provisions for the identification standards of the beneficial owner(s). One of the following standards needs to be met to qualify as the beneficial owner of the filing subject:
i. A natural person who ultimately owns more than 25% of the equity, shares, or partnership interests of the filing subject directly or indirectly.
ii. A natural person who does not meet Standard 1 but ultimately enjoys more than 25% of the profits/benefits rights and voting rights of the filing subject.
iii. A natural person who does not meet Standard 1 but actually controls the filing subject alone or jointly.
The abovementioned “actual control” includes but is not limited to the implementation of control through agreements or closely related people. For example, deciding on the appointment or removal of the legal representative, directors, supervisors, senior management personnel, or managing partners; deciding on the formulation or implementation of major business and management decisions; and deciding on financial revenue and expenditure, and actually controlling and using material assets or funds over a long period of time. If the three circumstances specified above are not applicable, the person responsible for daily operations and management of the record-filing entity shall be deemed to be the beneficial owner under the Measures. Article 7 also states that state-owned wholly-owned companies and state-controlled companies should register their legal representatives as beneficial owners.
Therefore, the “beneficial owner” under these Measures must ultimately penetrate down to the natural person.
Deadline for completing beneficial owner information record-filing
According to article 16 of the Measures, the entities that have incorporated before the implementation of these Measures shall complete the beneficial owner record-filing within one year after the implementation of the Measures, which is no later than 1 November 2025.
Legal consequences for failure to complete the record-filing and practical takeaways
Based on the legal consequence of the Measures, if the record-filing entity fails to file the beneficial owner information in accordance with the Measures, it shall be punished in accordance with the relevant administrative regulations on enterprise registration management. If PBoC and its branches find that the beneficial owner information reported by the record-filing entity is inaccurate, they shall order such entity to correct it within a time limit; if the entity refuses to correct it, it shall be fined not more than RMB 50,000.
Thus, enterprises registered before 1 November 2024 should pay attention to the grace period and the practical requirements for record-filing formalities from the local Administration for Market Regulation.
We will continue to monitor the implementation of the Measures and share the latest practical developments promptly.
Client Alert 2025-024