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Circular of the State Administration of Taxation concerning Printing and Distributing the Measures for the Self-declaration of Individual
Income Tax (for Trial Implementation)
Guo Shui Fa [2006] No.162
The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and cities specifically designated in the state plan:
For the purpose of reinforcing the administration of individual income tax collection, improving the system of self-declaration of
individual income tax, and maintaining the lawful rights and interests of taxpayers, the State Administration of Taxation formulated
the Measures for the Self-declaration of Individual Income Tax (for Trial Implementation) in accordance with the Individual Income
Tax Law of the People’s Republic of China and the detailed rules for implementation thereof, the Law of the People’s Republic of
China Concerning the Administration of Tax Collection and the detailed rules for implementation thereof, as well as other related
tax provisions, . The Measures are hereby printed and distributed to you. Please abide hereby earnestly.
Appendix: Specimen of Individual Income Tax Return
The State Administration of Taxation
November 6, 2006
Appendix:
Measures for the Self-declaration of Individual Income Tax (for Trial Implementation)
Chapter I General Provisions
Article 1
For the purpose of further reinforcing the collection administration of individual income tax, safeguarding tax revenues of the State,
maintaining the legitimate rights and interests of taxpayers, facilitating and regulating the self-declaration of taxpayers, the
present Measures are formulated in accordance with the Individual Income Tax Law of the People’s Republic of China (hereinafter referred
to as the Individual Income Tax Law) and the detailed rules for implementation thereof, Law of the People’s Republic of China Concerning
the Administration of Tax Collection (hereinafter referred to as the Law Concerning the Administration of Tax Collection) and the
detailed rules for implementation thereof, as well as other related laws and regulations..
Article 2
Where a taxpayer obligatory to pay tax under the Individual Income Tax Law and is under any of the following circumstances, he/she
shall make his/her tax declaration in accordance with the present Measures:
(1)
Acquiring an annual income of 120,000 Yuan or more;
(2)
Acquiring wages and salaries from two or more sources within the territory of China;
(3)
Acquiring incomes from abroad;
(4)
Acquiring taxable incomes for which there is no corresponding withholding agent;
(5)
Any other circumstance as stipulated by the State Council.
Article 3
Any taxpayer who acquires an annual income of 120,000 Yuan or more as prescribed in Item (1) of Article 2 of the present Measures
shall, whether the individual income tax has been paid in full amount for all items of his income, make tax declaration to the taxation
authorities in accordance with the present Measures after a tax year ends.
Any taxpayer who is under any of the circumstances as prescribed in Items (2) to (4) of Article 2 of the present Measures shall,
in accordance with the present Measures, make tax declaration to the taxation authorities after receiving the income.
The measures for those taxpayers who are under the circumstances as prescribed in Item (5) of Article 2 of the present Measures to
make tax declarations shall be separately stipulated in accordance with specific circumstances.
Article 4
The ” taxpayer who acquires an annual income of 120,000 Yuan or more” as stipulated in Item (1) of Article 2 of the present Measures
may not involve those individuals who have no residence within the territory of China and have resided within the territory of China
for less than one year in a tax year.
The “taxpayer who obtains incomes from abroad” as stipulated in Subparagraph (3) of Article 2 of the present Measures means those
individuals who have residence within the territory of China or have resided within the territory of China for one full year in a
tax year.
Chapter II Contents for Declaration
Article 5
After a tax year ends, a taxpayer who obtains an annual income of 120,000 Yuan or more shall fill in an Individual Income Tax Return
(For the taxpayer who obtains an annual income of 120,000 Yuan or more) (see the attached Form 1), and submit it to the taxation
authorities when making tax declaration, and submit the photocopy of his/her effective identification certificate as well as other
related materials required to be submitted by the taxation authorities at the same time .
The “effective identification certificate” includes the taxpayer’s identification card, passport, home visit permit, military staff
certificate and so on .
Article 6
The “annual income of 120,000 Yuan or more” as stipulated in the present Measures means the total amount of the following items of
income obtained by a taxpayer in a tax year reaching 120,000 Yuan:
(1)
Wages and salaries;
(2)
Income of production or business operation obtained by self-employed industrial and commercial households ;
(3)
Income from contractual or leased operation of enterprises and institutions;
(4)
Remunerations for providing services;
(5)
Author’s remunerations;
(6)
Franchise royalties ;
(7)
Interests, dividends and capital bonuses;
(8)
Income from leasing property;
(9)
Income from transferring property;
(10)
Contingent income; and
(11)
Other taxable income determined by the public finance department of the State Council.
Article 7
The “income” as stipulated in Article 6 of the present Measures does not include the following kinds of income:
(1)
Tax-exempt income mentioned in Subparagraphs (1) to (9) of Article 4 of the Individual Income Tax Law, namely,
(a)
awards forachievementsinscience, education,technology, culture, public health, physicalcultureandenvironmentalprotection
granted by provincial people’s governments, ministries and commissions under the State Council , the People’s Liberation Army units
at army level and above and by foreign or international organizations;
(b)
interests accruing from national bonds and other financial debentures issued by the state;
(c)
subsidies and allowances receivedunderthestateuniform provisions namely, special government allowances, allowances for academicians,
allowances for senior academicians that are granted in accordance with the provisions stipulated by the State Council as stipulated
in Article 13 of the Regulation concerning the Implementation of the Individual Income Tax Law, and other kinds of subsidies and
allowances that are exempt from individual income tax as stipulated by the State Council;
(d)
welfare benefits, pensions for the disabled or for the family of the deceased and relief funds ;
(e)
insurance compensation;
(f)
military severance pay and demobilization pay;
(g)
settling-in allowances, severance pay, retirement wages, retirement wages for veteran cadres, and living subsistence allowances for
retired veteran cadres distributed to cadres and employees underthestateuniform provisions;
(h)
incomes of diplomatic representatives, consular staff and other personnel of foreign embassies and consulates in China, which shall
be exempt from tax in accordance with the provisions of related laws of China; and
(i)
incomes which shall be exempt from tax under the international conventions in which the Chinese Government joins or agreements which
the Chinese Government has signed.
(2)
Incomes obtained from abroad which can be exempt from tax as stipulated in Article 6 of the Regulation concerning the Implementation
of the Individual Income Tax Law; and
(3)
Basic endowment insurance premiums, basic medical insurance premiums, unemployment insurance premiums and public accumulation fund
for housing construction paid by entities for their staff and individuals in accordance with the provisions of the State as stipulated
in Article 25 of the Regulation concerning the Implementation of the Individual Income Tax Law.
Article 8
The annual amount of all items of income as stipulated in Article 6 of the present Measures shall be calculated in accordance with
the following methods:
(1)
The incomes obtained from wages and salaries shall be calculated in light of the income prior to the expenses deduction (1,600 Yuan
per month) and additional expenses deduction (3,200 Yuan per month);
(2)
The incomes from production and business operations obtained by self-employed industrial and commercial households shall be calculated
in light of the taxable incomes. If the tax is collected by checking accounts, the corresponding incomes shall be calculated in light
of the total amount of incomes with the cost, expenses and losses deducted for each tax year; and if the tax is collected at a fixed
time and at a fixed amount, the corresponding incomes shall be calculated in light of the annual taxable incomes declared by the
taxpayer himself/herself or the annual taxable business amount declared by the taxpayer himself/herself multiplied by the rate of
taxable incomes;
(3)
The income from contractual or leased operation of enterprises and institutions shall be calculated in light of the total amount of
income for each tax year, namely, the operation profits actually obtained by the contractor or lessee plus his/her income with the
nature of wage and salary obtained from the enterprises and institutions he/she contracted or leased;
(4)
The remunerations for providing services or author’s remunerations or franchise royalties shall be calculated in light of the income
prior to the expenses deduction(800 Yuan or 20% of incomes each time);
(5)
The income obtained from leasing property shall be calculated in light of the amount of income prior to the expenses deduction (800
Yuan or 20% of incomes each time) and repairing charges;
(6)
The incomes obtained from transferring property shall be calculated in light of the amount of taxable incomes, namely, the balance
of the amount of income from transferring property deducting the original value of property and tax and related reasonable expenses
paid in the course of transferring property; and
(7)
The income obtained from interests, dividends and capital bonuses, contingent income or other incomes shall be calculated in light
of the total amount of income.
Article 9
A taxpayer who obtains incomes under any of the circumstances as stipulated in Subparagraph2to4 of Article 2 of the present
Measures shall fill in and submit the corresponding tax return (see Appendixes 2 C 9) to the taxation authorities , and submit other
related materials required to be submitted by the taxation authorities at the same time.
Chapter III Place for Declaration
Article 10
The places for a taxpayer who obtains an annual income of 120,000 Yuan or more to make tax declaration shall be at follows respectively:
(1)
Where the taxpayer work for an employer within the territory of China, he/she shall make tax declaration to the taxation authorities
at the locality of his/her employer;
(2)
Where the taxpayer work for two or more employers within the territory of China, he/she shall select and fix the taxation authorities
at the locality of one employer to make tax declaration;
(3)
Where the taxpayer is not employed for any employer within the territory of China but there is income of production or business operations
obtained by self-employed industrial and commercial households or income from contractual or leased operation of enterprises and
institutions (hereinafter referred to uniformly as income from production or business operations) in the items of annual incomes,
the taxpayer shall make tax declaration to the taxation authorities at the locality of the actual business place of one source; and
(4)
Where the taxpayer is not employed for any employer within the territory of China and there is no income from production or business
operations in the items of his/her annual income, the taxpayer shall make tax declaration to the taxation authorities at the locality
of his/her registered permanent residence. Where the taxpayer’s registered permanent residence is within the territory of China but
different from his/her habitual residence within the territory of China, the taxpayer shall select and fix the taxation authorities
at the locality of either to make tax declaration. Where the taxpayer has no registered permanent residence within the territory
of China, tax declaration shall be made to the taxation authorities at the locality of habitual residence within the territory of
China.
Article 11
A taxpayer who obtains incomes under the circumstances as stipulated in Subparagraphs (2) through (4) of Article 2 of the present
Measures shall make tax declaration respectively at the following places:
(1)
Where the taxpayer obtains wages and salaries from two or more sources, he/she shall select and fix the taxation authorities at the
locality of one employer to make tax declaration;
(2)
Where the taxpayer obtains income from abroad, he/she shall make tax declaration to the taxation authorities at the locality of his/her
registered permanent residence within the territory of China. Where the taxpayer’s registered permanent residence is within the territory
of China but different from his/her habitual residence within the territory of China, the taxpayer shall select and fix the taxation
authorities at the locality of either to make tax declaration. Where the taxpayer has no registered permanent residence within the
territory of China, tax declaration shall be made to the taxation authorities at the locality of his/her habitual residence within
the territory of China;
(3)
A self-employed industrial and commercial household shall make tax declaration to the taxation authorities at the locality of the
actual business place;
(4)
Where an investor of sole proprietorship enterprises or enterprises in partnerships has established two or more enterprises, the places
for tax declaration shall be determined on the basis of the following different circumstances:
(a)
Where all the enterprises are sole proprietorship enterprises, tax declaration shall be made respectively to the taxation authorities
at the locality of actual business place of each enterprise;
(b)
Where any established enterprise belongs to partnerships, tax declaration shall be made to the taxation authorities at the locality
of /her habitual residence; and
(c)
Where any established enterprise belongs to partnerships and the place of habitual residence of the individual investor is different
from the business management place of the established enterprises, the investor shall select and fix the taxation authorities of
the business management place of any partnership he/she has participated in the establishment thereof to make tax declarations.
(5)
Except for the above circumstances, tax declaration shall be made to the taxation authorities at the place where the taxpayer obtains
income.
Article 12
A taxpayer may not change the place for tax declaration at his/her own choice, and if the place for tax declaration needs to be changed
by virtue of any special reason, he/she shall report it to the former taxation authorities for archival filing.
Article 13
The place for tax declaration as stipulated in Item (c) of Subparagraph (4) of Article 11 of the present Measures may not be changed
within five years, unless by virtue of any special reason.
Article 14
The term “place of habitual residence ” of the present Measures means such an ultimate place where a taxpayer successively resides
for one year or more after leaving his/her place of registered permanent residence.
Chapter IV Time Limit for Declaration
Article 15
A taxpayer who obtains an annual income of 120,000 Yuan or more shall make tax declaration to the taxation authorities within three
months after a tax year ends, .
Article 16
If the taxable income obtained from production and business operations by self-employed industrial and commercial households, investors
of sole proprietorship enterprise or enterprises in partnerships which should be prepaid in monthly installments, the taxpayer shall
make tax declaration within seven days after each month ends; and if such taxable income should be prepaid in quarterly installments,
the taxpayer shall make tax declaration within seven days after each quarter ends. The taxpayer shall make clearing-up settlement
of payments within three months after a tax year ends.
Article 17
Where the taxable income obtained from contractual or leased operation of enterprises and institutions once at the end of a year,
the taxpayer shall make tax declaration within 30 days after the incomes are obtained; and where such incomes are obtained by several
times within a tax year, the taxpayer shall make tax declaration of advanced payments within seven days of the month following the
date in which the income was obtained each time; and make clearing-up settlement of the payments within three months after a tax
year ends.
Article 18
A taxpayer who obtains incomes from abroad shall make tax declaration to the taxation authorities within the territory of China within
30 days after a tax year ends.
Article 19
Except for the circumstances stipulated in Articles 15 to 18 of the present Measures, a taxpayer who should make tax declaration
for obtaining other kinds of income shall make tax declaration to the taxation authorities within seven days of the month following
the date in which the income was obtained.
Article 20
If a taxpayer can not make tax declaration within the stipulated time limit and requires to make the postponement, he/she shall be
handled in accordance with Article 27 of the Law concerning the Administration of Tax Collection and Article 37 of the Detailed
Rules for the Implementation of the Law concerning the Administration of Tax Collection.
Chapter V Methods for Declaration
Article 21
Tax declaration can be made by means of data messages or posts, or directly to the taxation authorities, or by other means consistent
with the provisions as stipulated by the taxation authorities.
Article 22
Where the tax declaration is made by means of data messages, the taxpayer shall keep related paper materials within the time limit
and in accordance with the requirements as stipulated by the taxation authorities .
Article 23
Where the tax declaration is made by means of post mail , the receipts of registered letters issued by the post office shall be the
proof of declaration, and the postmark date shall be taken as the actual date of declaration.
Article 24
A taxpayer may authorize an intermediary institution which is qualified to be the tax agency or someone else to make tax declaration.
Chapter VI Tax Declaration Administration
Article 25
The taxation authority shall publish all sorts of specimens of tax return on its website or place them at its tax service hall for
taking cognizance of tax declarations so as to be freely downloaded or used by taxpayers at any time.
Article 26
The taxation authorities shall remind those taxpayers who obtain an annual income of 120,000 Yuan or more to make self-declaration
by appropriate means within the legal time limit for tax declaration every year.
Article 27
The taxation authority that takes cognizance of tax declarations shall, according to the taxpayers’ declarations, handle the procedures
for collecting, surcharging, refunding and deducting taxes in accordance with the provisions.
Article 28
The taxation authorities shall draw tax paid certificates in accordance with the corresponding provisions for those taxpayers who
have made tax declaration and paid taxes.
Article 29
The taxation authorities shall keep the tax declaration information secret for the taxpayers in accordance with the law.
Article 30
Where a taxpayer changes the place for tax declaration, he shall report it to the former taxation authorities for archival filing,
and the former taxation authorities shall timely send the information about the taxpayer’s changing of the place for tax declaration
to the new taxation authorities.
Article 31
The taxation authorities shall set up tax payment archives for the taxpayers who have made tax declaration, and shall implement dynamic
administration.
Chapter VII Legal Liabilities
Article 32
Where a taxpayer fails to make tax declaration or submit tax payment materials within the stipulated time limit, it shall be handled
in accordance with Article 62 of the Law concerning the Administration of Tax Collection.
Article 33
Where a taxpayer forges, alters, conceals or illegally destroys accounting books or bookkeeping documentations, or overstates expenses
or does not state or understates revenues in the accounting books, or refuses to make tax declaration after having been informed
by the taxation authority to do so or makes spurious tax declaration, refuses to pay or underpays the taxes payable, it shall be
handled in accordance with Article 63 of the Law concerning the Administration of Tax Collection.
Article 34
Where a taxpayer fabricates any spurious tax calculation basis, it shall be handled in accordance with Paragraph 1 of Article 64
of the Law concerning the Administration of Tax Collection.
Article 35
Where a taxpayer obtains taxable income that should be withheld by a withholding agent, but the withholding agent fails to withhold
or collect the taxes which should have been withheld or collected, it shall be handled in accordance with Article 69 of the Law
concerning the Administration of Tax Collection.
Article 36
Where a tax official has any self-seeking misconduct or duty negligence, and fails to collect or under-collect the taxes payable,
he/she shall be handled in accordance with Paragraph 1 of Article 82 of the Law concerning the Administration of Tax Collection.
Article 37
Where a tax official abuses his/her official capacity and raises difficulties for taxpayers on purpose, he/she shall be handled in
accordance with Paragraph 2 of Article 82 of the Law concerning the Administration of Tax Collection.
Article 38
Where a taxation authority or tax official fails to keep secrets for taxpayers, it shall be handled in accordance with Article 87
of the Law concerning the Administration of Tax Collection.
Article 39
Where a tax agent violates the tax laws or administrative regulations, causing taxpayers fail to pay or underpay taxes, he/she shall
be handled in accordance with Article 98 of the Detailed Rules for the Implementation of the Law concerning the Administration of
Tax Collection.
Article 40
Any other tax-related violation shall be handled in accordance with the related tax laws and regulations.
Chapter VIII Supplementary Provisions
Article 41
The tax declaration returns shall be uniformly printed by the local taxation bureau of each province, autonomous region, municipality
directly under the Central Government or city specifically designated in the state plan in accordance with the specimens as stipulated
by the State Administration of Taxation.
Article 42
Other matters concerning tax declaration shall be governed by the Law in respect of the Administration of Tax Collection, the Individual
Income Tax Law and other related laws and regulations.
Article 43
The tax declaration of an annual income of 120,000 Yuan or more as stipulated in Subparagraph 1 of Article 2 of the present Measures
shall come into force as of January 1, 2006 in accordance with the time for implementation as stipulated in the Decision concerning
Revising the Individual Income Tax Law of the People’s Republic of China which is adopted at the 18th meeting of the Standing Committee
of the 10th National People’s Congress.
Article 44
The provisions in respect of tax declaration under the circumstances as stipulated in Subparagraphs (2) to (4) of Article 2 of the
present Measures shall come into force as of January 1, 2007, and the Circular of the State Administration of Taxation concerning
Printing and Distributing the Provisional Measures for the Self-declaration of Individual Income Tax (Guo Shui Fa [1995] No. 077)
shall be concurrently abolished.
Form 1 Individual Income Tax Return
Form 1
Individual Income Tax Return
For
individuals having an annual income of over 120,000 RMB Yuan
Taxpayer’s IDnumber:
Taxpayer’s name signature/stamp:
Income year:
Date of filing:
onetary unit: RMB Yuan
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Taxpayer’s name |
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Nationality |
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ID number |
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ID Type |
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Date
of arrival in China |
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Profession |
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Employer |
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Habitual residence |
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Address
in China |
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P.C. |
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Tel. |
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Items
of income |
Annual Income |
Tax payable |
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The State Administration of Taxation
Circular of the State Administration of Taxation on Relevant Operational Issues Concerning the Income Tax of Financial and Insurance
Enterprises
GuoShuiHan[2002] No.960
November 7, 2002
The state tax bureaus of the provinces, autonomous regions, municipalities directly under the Central Government, and municipalities
separately listed on the State plan:
In order to enhance the risk-resisting capacity of financial enterprises, to promote financial enterprises to develop soundly, and
in light of the problems concerning collection of enterprise income tax reported by the localities, several policy issues concerning
financial and insurance enterprises are hereby further clarified as follows:
I.
Disposition of the income tax on loan interest income of financial enterprises
1)
For the loans granted by financial enterprises, the interests shall be computed on time and be included in the current taxable income.
If a loan hasn’t been repaid within 90 days after maturity (including the extension, hereinafter the same), the receivable interests
not collected that occurred before that period (including the 90 days) shall be included in the current taxable income pursuant to
the provisions; and the receivable interests not collected that occur thereafter shall not be included in the current taxable income
until they have been actually collected.
2)
If the receivable interests not collected which have been included in the taxable income or for which the enterprise income tax has
been paid already are not recovered within 90 days after maturity (not including the 90 days), the amount may be off-set in the current
taxable income.
II.
Deduction of the commission expenditures of salesmen of insurance enterprises before taxation
1)
Insurance enterprises should include the taxable premium income and pay the business income tax in accordance with the total premium
income of the insurance contract. The commission paid by the insurance enterprise must not eat up part of premium income directly.
2)
For the commission expenditures of insurance enterprises, 5% of the total premium income from sales within the valid term of the insurance
contracts shall be deducted before taxation on the basis of legal vouchers within 5 years from the day of issuance of the policy;
the commission expenditures for the cancelled insurance may not be deducted before taxation. An insurance enterprise shall faithfully
provide the local tax authority with the commission computation and distribution statements and other relevant materials of the current
year.
III.
This Circular shall enter into force as of the day of promulgation. No tax refund will be granted for those that have been dealt with
pursuant to the relevant provisions previously, and these provisions shall be followed in the tax handling of those not handled.
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The State Administration of Taxation
2002-11-07
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The Constitution of the People’s Republic of China
(Adopted at the Fifth Session of the Fifth National People’s Congress on December 4, 1982 and promulgated by the National People’s
Congress on December 4, 1982 , According to the amendments to the Constitution of the People’s Republic of China adapted at the first
session of the seventh National People’s Congress on April 12, 1988, the amendments to the Constitution of the People’s Republic
of China adapted at the first session of the eighth National People’s Congress on march 29, 1993, the amendments to the Constitution
of the People’s Republic of China adapted at the second session of the ninth National People’s Congress on march 15, 1999, the amendments
to the Constitution of the People’s Republic of China adapted at the second session of the eighth National People’s Congress on march
14, 2004)
Contents
Preamble
Chapter I General Principle
Chapter II The Fundmental Rights and Duties of Citizens
Chapter III The Structure of the State
Section 1 The National people’s Congress
Section 2 The President of the People’s Republic of China
Section 3 The State Council
Section 4 The Central Millitary Commision
Section 5 The Local People’s Congress and Local People’s Governments at Various Levels
Section 6 The Organs of Self-government of National Autonomous Areas
Section 7 The People’s Courts and The People’s Procuratorates Chapter IV The National Flag, the National Anthem, the National Emblem
and the Capital
Preamble
China is a country with one of the longest histories in the world. The people of all of China’s nationalities have jointly created
a culture of grandeur and have a glorious revolutionary tradition.
After 1840, feudal China was gradually turned into a semi-colonial and semi-feudal country. The Chinese people waged many successive
heroic struggles for national independence and liberation and for democracy and freedom.
Great and earthshaking historical changes have taken place in China in the 20th century.
The Revolution of 1911, led by Dr. Sun Yat-sen, abolished the feudal monarchy and gave birth to the Republic of China. But the historic
mission of the Chinese people to overthrow imperialism and feudalism remained unaccomplished.
After waging protracted and arduous struggles, armed and otherwise, along a zigzag course, the Chinese people of all nationalities
led by the Communist Party of China with Chairman Mao Zedong as its leader ultimately,in 1949, overthrew the rule of imperialism,feudalism
and bureaucrat-capitalism, won a great victory in the New-Democratic Revolution and founded the People’s Republic of China. Since
then the Chinese people have taken control of state power and become masters of the country.
After the founding of the People’s Republic,China gradually achieved its transition from a New-Democratic to a socialist society.
The socialist transformation of the private ownership of the means of production has been completed, the system of exploitation of
man by man abolished and the socialist system established. The people’s democratic dictatorship led by the working class and based
on the alliance of workers and peasants, which is in essence the dictatorship of the proletariat, has been consolidated and developed.
The Chinese people and the Chinese People’s Liberation Army have defeated imperialist and hegemonist aggression, sabotage and armed
provocations and have thereby safeguarded China’s national independence and security and strengthened its national defence. Major
successes have been achieved in economic development. An independent and relatively comprehensive socialist system of industry has
basically been established. There has been a marked increase in agricultural production. Significant advances have been made in educational,
scientific and cultural undertakings, while education in socialist ideology has produced noteworthy results. The life of the people
has improved considerably.
Both the victory in China’s New-Democratic Revolution and the successes in its socialist cause have been achieved by the Chinese people
of all nationalities, under the leadership of the Communist Party of China and guidance of Marxism-Leninism and Mao Zedong Thought,
by upholding truth, correcting errors and surmounting numerous difficulties and hardships. China will be in the primary stage of
socialism for a long time to come. The basic task of the nation is to concentrate its effort on socialist modernization along the
socialist road with Chinese characteristics. Under the leadership of the Communist Party of China and the guidance of Marxism-Leninism,
Mao Zedong Thought, Deng Xiaoping Theory and the important thought of ‘Three Represents’, the Chinese people of all nationalities
will continue to adhere to the people’s democratic dictatorship and the socialist road, persevere in reform and opening to the outside
world, steadily improve various socialist institutions, develop the socialist market economy, develop socialist democracy, improve
the socialist legal system and work hard and self-dependently to modernize the country’s industry, agriculture, national defense
and science and technology step by step, and to promote the coordinated development of material civilization, political civilization
and spiritual civilization to build China into a socialist country that is prosperous, powerful, democratic and culturally advanced.
The exploiting classes as such have been abolished in our country. However, class struggle will continue to exist within certain bounds
for a long time to come. The Chinese people must fight against those forces and elements, both at home and abroad, that are hostile
to China’s socialist system and try to undermine it.
Taiwan is part of the sacred territory of the People’s Republic of China. It is the inviolable duty of all Chinese people, including
our compatriots in Taiwan, to accomplish the great task of reunifying the motherland.
In building socialism it is essential to rely on workers, peasants and intellectuals and to unite all forces that can be united. In
the long years of revolution and construction, there has been formed under the leadership of the Communist Party of China a broad
patriotic united front that is composed of democratic parties and people’s organizations, embracing all socialist working people,
builders of the socialist cause, all patriots who support socialism and all patriots who stand for reunification of the motherland.
This united front will continue to be consolidated and developed. The Chinese People’s Political Consultative Conference, a broadly
based representative organization of the united front which has played a significant historical role, will play a still more important
role in the country’s political and social life, in promoting friendship with other countries and in the struggle for socialist modernization
and for the reunification and unity of the country. The system of the multi- party cooperation and political consultation led by
the Communist Party of CHina will exist and develop for a long time.
The People’s Republic of China is a unitary multi-national state created jointly by the people of all its nationalities. Socialist
relations of equality, unity and mutual assistance have been established among the nationalities and will continue to be strengthened.
In the struggle to safeguard the unity of the nationalities, it is necessary to combat big-nation chauvinism, mainly Han chauvinism,
and to combat local national chauvinism. The state will do its utmost to promote the common prosperity of all the nationalities.
China’s achievements in revolution and construction are inseparable from the support of the people of the world. The future of China
is closely linked to the future of the world. China consistently carries out an independent foreign policy and adheres to the five
principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal
affairs, equality and mutual benefit, and peaceful coexistence in developing diplomatic relations and economic and cultural exchanges
with other countries. China consistently opposes imperialism, hegemonism and colonialism, works to strengthen unity with the people
of other countries, supports the oppressed nations and the developing countries in their just struggle to win and preserve national
independence and develop their national economies, and strives to safeguard world peace and promote the cause of human progress.
This Constitution, in legal form, affirms the achievements of the struggles of the Chinese peopl
e of all nationalities and defines the basic system and basic tasks of the state; it is the fundamental law of the state and has
supreme legal authority. The people of all nationalities, all state organs, the armed forces, all political parties and public organizations
and all enterprises and institutions in the country must take the Constitution as the basic standard of conduct, and they have the
duty to uphold the dignity of the Constitution and ensure its implementation.
Chapter I General Principle
Article 1
The People’s Republic of China is a socialist state under the people’s democratic dictatorship led by the working class and based
on the alliance of workers and peasants.
The socialist system is the basic system of the People’s Republic of China. Disruption of the socialist system by any organization
or individual is prohibited.
Article 2
All power in the People’s Republic of China belongs to the people.
The National People’s Congress and the local people’s congresses at various levels are the organs through which the people exercise
state power.
The people administer state affairs and manage economic, cultural and social affairs through various channels and in various ways
in accordance with the law.
Article 3
The state organs of the People’s Republic of China apply the principle of democratic centralism.
The National People’s Congress and the local people’s congresses at various levels are constituted through democratic elections. They
are responsible to the people and subject to their supervision.
All administrative, judicial and procuratorial organs of the state are created by the people’s congresses to which they are responsible
and by which they are supervised.
The division of functions and powers between the central and local state organs is guided by the principle of giving full scope to
the initiative and enthusiasm of the local authorities under the unified leadership of the central authorities.
Article 4
All nationalities in the People’s Republic of China are equal. The state protects the lawful rights and interests of the minority
nationalities and upholds and develops a relationship of equality, unity and mutual assistance among all of China’s nationalities.
Discrimination against and oppression of any nationality are prohibited; any act which undermines the unity of the nationalities
or instigates division is prohibited.
The state assists areas inhabited by minority nationalities in accelerating their economic and cultural development according to the
characteristics and needs of the various minority nationalities.
Regional autonomy is practiced in areas where people of minority nationalities live in concentrated communities; in these areas organs
of self-government are established to exercise the power of autonomy. All national autonomous areas are integral parts of the People’s
Republic of China.
All nationalities have the freedom to use and develop their own spoken and written languages and to preserve or reform their own folkways
and customs.
Article 5
The state upholds the uniformity and dignity of the socialist legal system.
No laws or administrative or local rules and regulations may contravene the Constitution.
All state organs, the armed forces, all political parties and public organizations and all enterprises and institutions must abide
by the Constitution and the law. All acts in violation of the Constitution or the law must be investigated.
No organization or individual is privileged to be beyond the Constitution or the law.
Article 6
The basis of the socialist economic system of the People’s Republic of China is socialist public ownership of the means of production,
namely, ownership by the whole people and collective ownership by the working people.
The system of socialist public ownership supersedes the system of exploitation of man by man; it applies the principle of ” from each
according to his ability, to each according to his work.”
Article 7
The state-owned economy, namely, the socialist economy under ownership by the whole people, is the leading force in the national
economy. The state ensures the consolidation and growth of the state-owned economy.
Article 8
In rural areas the responsibility system, the main form of which is household contract that links remuneration to output, and other
forms of cooperative economy, such as producers’, supply and marketing, credit and consumers cooperatives, belong to the sector of
socialist economy under collective ownership by the working people. Working people who are members of rural economic collectives
have the right, within the limits prescribed by law, to farm plots of cropland and hilly land allotted for their private use, engage
in household sideline production and raise privately-owned livestock.
The various forms of cooperative economy in the cities and towns, such as those in the handicraft, industrial, building, transport,
commercial and service trades, all belong to the sector of socialist economy under collective ownership by the working people.
The state protects the lawful rights and interests of the urban and rural economic collectives and encourages, guides and helps the
growth of the collective economy.
Article 9
All mineral resources, waters, forests, mountains, grasslands, unreclaimed land, beaches and other natural resources are owned by
the state, that is, by the whole people, with the exception of the forests, mountains, grasslands, unreclaimed land and beaches that
are owned by collectives in accordance with the law.
The state ensures the rational use of natural resources and protects rare animals and plants. Appropriation or damaging of natural
resources by any organization or individual by whatever means is prohibited.
Article 10
Land in the cities is owned by the state.
Land in the rural and suburban areas is owned by collectives except for those portions which belong to the state in accordance with
the law; house sites and privately farmed plots of cropland and hilly land are also owned by collectives.
The state may, for the public interest, expropriate or take over land for public use, and pay compensation in accordance with the
law.
No organization or individual may appropriate, buy, sell or otherwise engage in the transfer of land by unlawful means. The rights
to the use of land may be transferred according to law.
All organizations and individuals using land must ensure its rational use.
Article 11
The individual economy of urban and rural working people, operating within the limits prescribed by law, is a complement to the socialist
public economy. The state protects the lawful rights and interests of the individual economy.
The state protects the lawful rights and interests of the non-public sectors of the economy, including individual and private sectors
of the economy. The state encourages, supports and guides the development of the non-public sectors of the economy, and exercises
supervision and control over the non-public sectors according to law.
The state permits the private sector of the economy to exist and develop within the limits prescribed by law. The private sector of
the economy is a complement to the socialist public economy. The state protects the lawful rights and interests of the private sector
of the economy, and exercises guidance, supervision and control over the private sector of the economy.
Article 12
Socialist public property is inviolable.
The state protects socialist public property. Appropriation or damaging of state or collective property by any organization or individual
by whatever means is prohibited.
Article 13
The lawful private property of citizens may not be encroached upon.
The state protects by law the right of citizens to own private property and the right to inherit private property.
The state may, for the public interest, expropriate or take over private property of citizens for public use, and pay compensation
in accordance with the law.
The state protects according to law the right of citizens to inherit private property.
Article 14
The state continuously raises labour productivity, improves economic results and develops the productive forces by enhancing the
enthusiasm of the working people, raising the level of their technical skill, disseminating advanced science and technology, improving
the systems of economic administration and enterprise operation and management, instituting the socialist system of responsibility
in various forms and improving the organization of work.
The state practises strict economy and combats waste.
The state properly apportions accumulation and consumption, concerns itself with the interests of the collective and the individual
as well as of the state and, on the basis of expanded production, gradually improves the material and cultural life of the people.
The state establishes and improves the social security system fitting in with the level of economic development.
Article 15
The state practises socialist market economy.
The state strengthens economic legislation, improves macro-regulation and control.
The state prohibits in accordance with the law any organization or individual from disturbing the socia-economic order.
Article 16
State-owned enterprises have decision-making power with regard to their operation within the limits prescribed by law.
State-owned enterprises practise democratic management through congresses of workers and staff and in other ways in accordance with
the law.
Article 17
Collective economic organizations have decision- making power in conducting independent economic activities, on condition that they
abide by the relevant laws.
Collective economic organizations practise democratic management in accordance with the law, elect or remove their managerial personnel
and decides on major issues concerning operation and management.
Article 18
The People’s Republic of China permits foreign enterprises, other foreign economic organizations and individual foreigners to invest
in China and to enter into various forms of economic cooperation with Chinese enterprises and other Chinese economic organizations
in accordance with the law of the People’s Republic of China.
All foreign enterprises, other foreign economic organizations as well as Chinese-foreign joint ventures within Chinese territory shall
abide by the law of the People’s Republic of China. Their lawful rights and interests are protected by the law of the People’s Republic
of China.
Article 19
The state undertakes the development of socialist education and works to raise the scientific and cultural level of the whole nation.
The state establishes and administers schools of various types, universalizes compulsory primary education and promotes secondary,
vocational and higher education as well as preschool education.
The state develops educational facilities in order to eliminate illiteracy and provide political, scientific, technical and professional
education as well as general education for workers, peasants, state functionaries and other working people. It encourages people
to become educated through independent study.
The state encourages the collective economic organizations, state enterprises and institutions and other sectors of society to establish
educational institutions of various types in accordance with the law.
The state promotes the nationwide use of Putonghua (common speech based on Beijing pronunciation).
Article 20
The state promotes the development of the natural and social sciences, disseminates knowledge of science and technology, and commends
and rewards achievements in scientific research as well as technological innovations and inventions.
Article 21
The state develops medical and health services, promotes modern medicine and traditional Chinese medicine, encourages and supports
the setting up of various medical and health facilities by the rural economic collectives, state enterprises and institutions and
neighborhood organizations, and promotes health and sanitation activities of a mass character, all for the protection of the people’s
health.
The state develops physical culture and promotes mass sports activities to improve the people’s physical fitness.
Article 22
The state promotes the development of art and literature, the press, radio and television broadcasting, publishing and distribution
services, libraries, museums, cultural centres and other cultural undertakings that serve the people and socialism, and it sponsors
mass cultural activities.
The state protects sites of scenic and historical interest, valuable cultural monuments and relics and other significant items of
China’s historical and cultural heritage.
Article 23
The state trains specialized personnel in all fields who serve socialism, expands the ranks of intellectuals and creates conditions
to give full scope to their role in socialist modernization.
Article 24
The state strengthens the building of a socialist society with an advanced culture and ideology by promoting education in high ideals,
ethics, general knowledge, discipline and legality, and by promoting the formulation and observance of rules of conduct and common
pledges by various sections of the people in urban and rural areas.
The state advocates the civic virtues of love of the motherland, of the people, of labour, of science and of socialism. It conducts
education among the people in patriotism and collectivism, in internationalism and communism and in dialectical and historical materialism,
to combat capitalist, feudal and other decadent ideas.
Article 25
The state promotes family planning so that population growth may fit the plans for economic and social development.
Article 26
The state protects and improves the environment in which people live and the ecological environment. It prevents and controls pollution
and other public hazards.
The state organizes and encourages afforestation and the protection of forests.
Article 27
All state organs carry out the principle of simple and efficient administration, the system of responsibility for work and the system
of training functionaries and appraising their performance in order constantly to improve the quality of work and efficiency and
combat bureaucratism.
All state organs and functionaries must rely on the support of the people, keep in close touch with them, heed their opinions and
suggestions, accept their supervision and do their best to serve them.
Article 28
The state maintains public order and suppresses treasonable and other counter-revolutionary activities; it penalizes criminal activities
that endanger public security and disrupt the socialist economy as well as other criminal activities; and it punishes and reforms
criminals.
Article 29
The armed forces of the People’s Republic of China belong to the people. Their tasks are to strengthen national defence, resist aggression,
defend the motherland, safeguard the people’s peaceful labour, participate in national reconstruction and do their best to serve
the people.
The state strengthens the revolutionization, modernization and regularization of the armed forces in order to increase national defence
capability.
Article 30
The administrative division of the People’s Republic of China is as follows:
(1)
The country is divided into provinces, autonomous regions and municipalities directly under the Central Government;
(2)
Provinces and autonomous regions are divided into autonomous prefectures, counties, autonomous counties, and cities;
(3)
Counties and autonomous counties are divided into townships, nationality townships, and towns.
Municipalities directly under the Central Government and other large cities are divided into districts and counties. Autonomous prefectures
are divided into counties, autonomous counties, and cities.
All autonomous regions, autonomous prefectures and autonomous counties are national autonomous areas.
Article 31
The state may establish special administrative regions when necessary. The systems to be instituted in special administrative regions
shall be prescribed by law enacted by the National People’s Congress in the light of specific conditions.
Article 32
The People’s Republic of China protects the lawful rights and interests of foreigners within Chinese territory; foreigners on Chinese
territory must abide by the laws of the People’s Republic of China.
The People’s Republic of China may grant asylum to foreigners who request it for political reasons.
Chapter II The Fundmental Rights and Duties of Citizens
Article 33
All persons holding the nationality of the People’s Republic of China are citizens of the People’s Republic of China.
All citizens of the People’s Republic of China are equal before the law.
The state respects and protects human rights.
Every citizen is enpost_titled to the rights and at the same time must perform the duties prescribed by the Constitution and the law.
Article 34
All citizens of the People’s Republic of China who have reached the age of 18 have the right to vote and stand for election, regardless
of ethnic status, race, sex, occupation, family background, religious belief, education, property status or length of residence,
except persons deprived of political rights according to law.
Article 35
Citizens of the People’s Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and
of demonstration.
Article 36
Citizens of the People’s Republic of China enjoy freedom of religious belief.
No state organ, public organization or individual may compel citizens to believe in, or not to believe in, any religion; nor may they
discriminate against citizens who believe in, or do not believe in, any religion.
The state protects normal religious activities. No one may make use of religion to engage in activities that disrupt public order,
impair the health of citizens or interfere with the educational system of the state.
Religious bodies and religious affairs are not subject to any foreign domination.
Article 37
Freedom of the person of citizens of the People’s Republic of China is inviolable.
No citizen may be arrested except with the approval or by decision of a people’s procuratorate or by decision of a people’s court,
and arrests must be made by a public security organ.
Unlawful detention or deprivation or restriction of citizens freedom of the person by other means is prohibited, and unlawful search
of the person of citizens is prohibited.
Article 38
The personal dignity of citizens of the People’s Republic of China is inviolable. Insult, libel, false accusation or false incrimination
directed against citizens by any means is prohibited.
Article 39
The residences of citizens of the People’s Republic of China are inviolable. Unlawful search of, or intrusion into, a citizen’s residence
is prohibited.
Article 40
Freedom and privacy of correspondence of citizens of the People’s Republic of China are protected by law. No organization or individual
may, on any ground, infringe upon citizens freedom and privacy of correspondence, except in cases where, to meet the needs of state
security or of criminal investigation, public security or procuratorial organs are permitted to censor correspondence in accordance
with procedures prescribed by law.
Article 41
Citizens of the People’s Republic of China have the right to criticize and make suggestions regarding any state organ or functionary.
Citizens have the right to make to relevant state organs complaints or charges against, or exposures of, any state organ or functionary
for violation of the law or dereliction of duty; but fabrication or distortion of facts for purposes of libel or false incrimination
is prohibited.
The state organ concerned must deal with complaints, charges or exposures made by citizens in a responsible manner after ascertaining
the facts. No one may suppress such complaints, charges and exposures or retaliate against the citizens making them.
Citizens who have suffered losses as a result of infringement of their civic rights by any state organ or functionary have the right
to compensation in accordance with the law.
Article 42
Citizens of the People’s Republic of China have the right as well as the duty to work.
Through various channels, the state creates conditions for employment, enhances occupational safety and health, improves working conditions
and, on the basis of expanded production, increases remuneration for work and welfare benefits.
Work is a matter of honour for every citizen who is able to work. All working people in state-owned enterprises and in urban and rural
economic collectives should approach their work as the masters of the country that they are. The state promotes socialist labour
emulation, and commends and rewards model and advanced workers. The state encourages citizens to take part in voluntary labour.
The state provides necessary vocational training for citizens before they are employed.
Article 43
Working people in the People’s Republic of China have the right to rest.
The state expands facilities for the rest and recuperation of the working people and prescribes working hours and vacations for workers
and staff.
Article 44
The state applies the system of retirement for workers and staff of enterprises and institutions and for functionaries of organs
of state according to law. The livelihood of retired personnel is ensured by the state and society.
Article 45
Citizens of the People’s Republic of China have the right to material assistance from the state and society when they are old, ill
or disabled. The state develops social insurance, social relief and medical and health services that are required for citizens to
enjoy this right.
The state and society ensure the livelihood of disabled members of the armed forces, provide pensions to the families of martyrs and
give preferential treatment to the families of military personnel.
The state and society help make arrangements for the work, livelihood and education of the blind, deaf-mutes and other handicapped
citizens.
Article 46
Citizens of the People’s Republic of China have the duty as well as the right to receive education.
The state promotes the all-round development of children and young people, morally, intellectually and physically.
Article 47
Citizens of the People’s Republic of China have the freedom to engage in scientific research, literary and artistic creation and
other cultural pursuits. The state encourages and assists creative endeavours conducive to the interests of the people that are made
by citizens engaged in education, science, technology, literature, art and other cultural work.
Article 48
Women in the People’s Republic of China enjoy equal
|
the China Banking Regulatory Commission
Decree of the China Banking Regulatory Commission
No.4
The Detailed Rules for the Implementation of the Regulation of the People’s Republic of China on the Administration of Foreign-funded
Financial Institutions, which were adopted at the 16th Chairmen’s meeting of China Banking Regulatory Commission, are hereby promulgated
and shall go into effect as of September 1, 2004.
Chairman of the China Banking Regulatory Commission Liu Mingkang
July, 26, 2004
Detailed Rules for the Implementation of the Regulation of the People’s Republic of China on the Administration of Foreign-funded
Financial Institutions
Chapter I General Provisions
Article 1
The present Detailed Rules have been formulated according to the Banking Administration Law of the People’s Republic of China, the
Law of the People’s Republic of China on Commercial Banks and the Regulation of the People’s Republic of China on the Administration
of Foreign-funded Financial Institutions (hereinafter referred to as the Regulation).
Article 2
The “foreign capital” as used in Item 1and 4 of Article 2 of the Regulation refers to the capital contributed by institutions registered
outside the territory of the People’s Republic of China.
The “foreign bank” as mentioned in item (2) refers to a commercial bank that is registered outside the territory of the People’s Republic
of China and that are approved or accredited by the financial supervisory authority of the place where it is located.
The “foreign financial institution” as mentioned in Item 3 and 5 refer to a financial institution that is registered outside the territory
of the People’s Republic of China and is approved or accredited by the financial supervisory authority of the places where it is
located.
Article 3
The “foreign-funded legal entity” as mentioned in the present Detailed Rules refers to a wholly foreign-funded bank, a Sino-foreign
joint equity bank, a wholly foreign-funded finance company and a Sino-foreign joint equity finance company as mentioned in the Regulation.
Article 4
China Banking Regulatory Commission (hereinafter referred to as the CBRC) is the competent authority responsible for administering
and supervising the foreign-funded financial institutions. The local offices of the CBRC shall be responsible for the routine supervision
and administration of the foreign-funded financial institutions within their respective jurisdiction.
Chapter II Establishment and Registration
Article 5
The “prudential requirements” as mentioned in Articles 6 through 8 shall include but not limited to the following:
(1)
Sound corporate governance structure;
(2)
Persistently sound operational performance;
(3)
Financial statements drawn up in line with the prudent accounting principle, and clean report by the accounting firm on the financial
statements for three consecutive years prior to filing the application;
(4)
No record of serious violation of laws or regulations, and no record of bad credit;
(5)
Favorable reputation in the banking sector and good social image;
(6)
Stable political and economic situation in the home country or region of the applicant in the case of the establishment of a branch
by a foreign bank, and a sound communication mechanism between the home financial supervisory authority and the CBRC; and
(7)
Other relevant requirements on investors in the financial sector as provided for in the laws and regulations.
Article 6
The shareholder or the largest shareholder of a wholly foreign-funded bank established under Article 6 of the Regulation must be
a commercial bank.
The sole shareholder or the largest shareholder of a wholly foreign-funded finance company established under Article 6 of the Regulation
must be a commercial bank or a finance company.
The capital adequacy ratio of the commercial bank as mentioned in this Article may not be lower than 8%.
The Item 2 and 3 of Article 6 of the Regulation shall apply to the sole shareholder or the largest shareholder.
Article 7
As for a joint-equity bank established under Article 8 of the Regulation, its sole shareholder of foreign party or largest shareholder
of foreign party must be a commercial bank.
As for a joint-equity finance company established under Article 8 of the Regulation, its sole shareholder of foreign party or largest
shareholder of foreign party must be a commercial bank or a finance company.
The capital adequacy ratio of the commercial bank as mentioned in this Article may not be lower than 8%.
The Item 2 and 3 of Article 8 of the Regulation shall apply to the sole foreign shareholder of the foreign party or the largest foreign
shareholder.
Article 8
The “representative office established by the applicant or foreign party within the territory of China” refers to a representative
office established under the supervision of the CBRC. The “end of the year prior to the submission of the application” refers to
the end of the fiscal year prior to the date of application.
Article 9
The “prudential requirements” as mentioned in Article 20 of the Regulation and Articles 16, 17 and 40 of the present Detailed Rules
shall include but not limited to the following:
(1)
Sound cooperate governance structure;
(2)
Sound risk management system;
(3)
Sound internal control system;
(4)
Effective information management system;
(5)
The managerial personnel having good expertise and management capacity;
(6)
Persistently sound operational performances and good asset quality of the applicant;
(7)
No record of serious violation of laws or regulations, and;
(8)
Effective measures for fighting money laundering.
Article 10
The “feasibility study report” as mentioned in Articles 9 through 11 of the Regulation and Article 18 of the present Detailed Rules
shall at least include the basic information of the applicant, the analysis of the market prospect of the institution to be established,
the business development plan of the institution to be established, as well as the organizational framework, and projection of asset-liability
size and profit for the first three years, etc.
The “name of a to-be-established branch of a foreign bank” as mentioned in Item 1 of Article 10 of the Regulation shall include
both the Chinese name and the foreign name, and the Chinese name shall indicate the nationality and form of liabilities of the foreign
bank.
Article 11
The “photocopy of business license” as mentioned in the Regulation and the present Detailed Rules refers to the photocopy of the business
license or other approval document on financial business. The photocopy of business license, power of attorney, letter from the foreign
bank to discharge the tax and debt obligation of its branch bank in China, etc. shall be either notarized by an institution accredited
by the home country or region or certified by the embassy or consulate of the People’s Republic of China in that country, except
the photocopy of business license as issued by the Chinese industry and commerce administration authority.
Article 12
The “relevant materials about the Chinese party” as mentioned in item 6 of Article 11 of the Regulation refers to the photocopy
of business license of the Chinese party and its annual reports of the latest 3 years.
Article 13
The “annual reports” as mentioned in the Regulation and the present Detailed Rules shall be audited with the auditing opinions issued
by the accredited accounting firm of the home country or region of the applicant. Annual reports printed in a language other than
Chinese or English shall be accompanied by Chinese or English translations.
Article 14
The “other materials” as mentioned in Articles 9 through 11 of the Regulation shall include but not limited to the following:
(1)
An applicant applying for establishing a foreign-funded institution for the first time shall provide the information about the financial
system and the financial supervision laws and regulations of it home country or region;
(2)
The articles of association of the applicant;
(3)
The organizational chart of the applicant and the group it belongs to, the name list of the major shareholders, overseas branches
and associated companies;
(4)
Policies or rules of the applicant on fighting money laundering.
Article 15
Except the annual reports, all application materials as required in the present Detailed Rules, if written in a foreign language,
shall be accompanied by Chinese translations.
Article 16
Where a foreign bank intends to establish a new branch in China, its existing branches in China shall meet the prudential requirements
as specified by the CBRC and the conditions as provided for in Item 2, 3, 4 and 5 of Article 7 of the Regulation.
Article 17
A wholly foreign-funded bank or a Sino-foreign joint-equity bank shall meet the following conditions when applying for the establishment
of a branch:
(1)
It has operated in China for more than 3 years, and it has made profits for 2 successive fiscal years prior to the application;
(2)
Its capital adequacy ratio is not less than 8%;
(3)
The applicant shall allocate the minimum amount of convertible currency equivalent to RMB 100 million yuan as the working capital
of each new branch to be established; the aggregate amount of the working capital allocated to all its branches within China, including
the to-be-established ones, may not exceed 60% of its registered capital; and
(4)
Other prudential requirements as specified by the CBRC.
Article 18
When a wholly foreign-funded bank or joint-equity bank applies for the establishment of a branch, it shall submit the following materials
(in triplicate) to the CBRC local office. After issuance of the preliminary examination opinions by the local office of the CBRC,
the application materials shall be directly sent to the CBRC for examination and approval with a copy sent to the CBRC local office
at a higher level.
(1)
Letter of application signed by the board chairman or the president (CEO, general manager) of the applicant, which shall include the
name of the to-be-established branch, the amount of working capital to be allocated, and intended business types, etc;
(2)
The resolution of the board of directors on approval of the establishment of the branch;
(3)
A feasibility study report;
(4)
A photocopy of business license;
(5)
The annual reports of the latest three years;
(6)
The articles of association of the applicant; and
(7)
Other materials as required by the CBRC.
Article 19
The letter of application for the establishment of a foreign-funded legal entity shall be signed by the chairmen or president (CEO,
general manager) of each investor and addressed to the Chairman of the CBRC. The letter of application for the establishment of a
branch of a foreign bank shall be signed by the Chairman or president (CEO, general manager) of the applicant and addressed to the
Chairman of the CBRC.
Article 20
For the establishment of a foreign-funded financial institution, the applicant shall submit to the CBRC the application materials
(in duplicate) as required in Articles 9 through 11 of the Regulation, and simultaneously submit a copy to the CBRC local office
of the place where the to-be-established institution will be located.
Article 21
The CBRC shall make a decision of acceptance or rejection within 6 months as of the date of receiving all application materials for
establishing a foreign-funded financial institution and shall inform the applicant of the decision in writing.
The applicant shall, within 15 days after receiving an acceptance notice, fetch a formal application form from the relevant CBRC local
office of the place where the to-be-established institution will be located, and start the preparatory work for the establishment.
During the preparatory period, the applicant shall form a preparatory team to take charge of the preparatory work and shall submit
the name list of team leaders to the relevant CBRC local office. When the preparatory work is finished, the preparatory team shall
be dissolved automatically. The preparatory period is 6 months.
Where the applicant fails to fetch the formal application form within the prescribed time limit, it may not apply again for establishing
an operational office in the same city within 1 year as of the date of receipt of the acceptance notice.
An applicant who receives a rejection notice may apply again for establishing an operational office when satisfying the requirements
of the establishment of a foreign-funded financial institution.
Article 22
The “principal person” as mentioned in Article 14 of the Regulation refers to the chairman or president of a foreign-funded legal
entity (CEO, general manager), or the president of a branch of a foreign bank (general manager).
Article 23
An applicant shall complete the following tasks within the preparatory period:
(1)
Establishing an internal control system, including an internal organizational structure, authorization and accreditation, management
of credit funds as well as the control policies and operational procedures for capital transaction, accounting and computer system.
The internal control system and operational procedures shall be sent to the relevant CBRC local office.
(2)
Staffing an appropriate number of business personnel that meet the needs of its business development and have received relevant training
on policies, regulations and professional knowledge, so as to meet the requirements for effective supervision and control of the
major business risks, examination, approval and reexamination of business at different levels, the division of work and balance of
the key posts;
(3)
Printing the main business vouchers and receipts used for external transactions and submitting samples thereof to the relevant CBRC
local office;
(4)
Equipping with the security facilities accredited by the relevant departments, the pertinent certifications of which shall be submitted
to the relevant CBRC local office;
(5)
Completing the audit on its internal control system, accounting system, and computer system by an accounting firm accredited by the
relevant CBRC local office before it opens business, and the audit report shall be submitted to the relevant CBRC local office.
Article 24
Where an applicant applies for the extension of the preparatory period, it shall submit an application to the relevant CBRC local
office not later than 1 month prior to the expiration of the preparatory period. The letter of application shall be signed by the
person in charge of the preparatory team of the to-be-established institution.
Where an applicant submits an application for the extension of the preparatory period beyond the prescribed time limit, the application
will be rejected the relevant CBRC local office.
The relevant CBRC local office shall, within 15 days after the date of receiving the application for extending the preparatory period,
decide on whether or not to approve such an extension. In the case of rejection, it shall give a written notice to the applicant
explaining the reasons for the rejection, and send a copy to the CBRC level by level.
Article 25
Upon the completion of the preparatory work, the applicant shall submit the letter of application signed by the person in charge of
the preparatory team, the application form filled out, as well as the documents as provided for in Article 14 of the Regulation,
to the CBRC local office of the place where the to-be-established institution will be located. After the issuance of preliminary
examination opinions by the CBRC local office, the application shall be directly submitted to the CBRC for examination and approval
with a copy sent to the CBRC local office at a higher level.
Article 26
The CBRC shall make a decision of approval or disapproval within 2 months as of the date of the complete application form and relevant
materials. The applicant shall, within 15 days as of the date of receipt of the notice from the CBRC, fetch the documents of whether
to approve the establishment of a foreign-funded financial institution. In the case of disapproval, it may apply again when satisfying
all the requirements for the establishment of a foreign-funded financial institution.
Article 27
If the application for establishing a foreign-funded institution is approved, the applicant shall apply for a prior opening inspection
to the relevant CBRC local office after obtaining the approval documents from the CBRC headquarters. The letter of application shall
be signed by the chairman or president of the board of directors (CEO, general manager) of the foreign-funded legal entity, or the
president or general manager of the branch of the foreign bank. After the applicant passes the inspection conducted by the relevant
CBRC local office, it shall fetch a financial business certificate from the CBRC. If it fails to pass the inspection, the foreign-funded
financial institution may apply to the competent office for a new inspection within 10 days as of the date of receiving the notice
of the inspection failure.
Article 28
Before a foreign-funded institution starts business, it shall make a public announcement of its opening of business on the national
newspapers as designated by the CBRC headquarters and the local newspapers as designated by the relevant CBRC local office, and shall
inform the relevant CBRC local office of the date of start of business in writing.
Article 29
The foreign-funded financial institution shall start business within 3 months after obtaining approval of its establishment granted
by the CBRC, except in the case when the relevant CBRC local office approves it to postpone the start of business under special circumstances.
Where a foreign-funded institution applies for postponing the start of business, it shall submit an application for the postponement
to the relevant CBRC local office within 2 months after the application for its establishment is approved by the CBRC. The letter
of application shall be signed by the chairman or president (CEO, general manager) of the foreign-funded legal entity, or the president
(general manager) of the branch of the foreign bank.
The relevant CBRC local office shall make a decision on whether or not to approve the postponement within 15 days after receiving
the application materials. If it makes a decision of disapproval, it shall notify the foreign-funded institution of the reasons for
disapproval in a written form and send a copy to the CBRC headquarters level by level.
Where a foreign-funded financial institution submit an application for postponing the start of business beyond the prescribed time
limit, the relevant CBRC local office shall reject its application for postponement.
The start of business may be postponed for no more than 3 months. If a foreign-funded institution fails to start business within the
time limit, the approval of establishment will become invalid automatically. The foreign-funded institution shall hand over the financial
business certificate to the CBRC. The applicant may not apply again for establishing an operational office in the same city within
1 year as of the day when the last establishment approval becomes invalid.
Article 30
Restructuring of a branch of a foreign bank into a foreign-funded legal entity shall in carried out in compliance with the principle
of legitimacy, prudence and continuous operation and vice versa.
Where a branch of a foreign bank intends to restructure into a foreign-funded legal entity, it shall apply to the relevant CBRC local
office in accordance with the requirements and procedures of the establishment of a foreign-funded legal entity. Where a foreign-funded
legal entity intends to restructure into a branch of a foreign bank, it shall apply to the relevant CBRC local office in accordance
with the requirements and procedures of the establishment of a branch of a foreign bank. The application shall be directly submitted
to the CBRC for examination and approval through the relevant CBRC local office and a copy to the CBRC local office at a higher level
at the same time. The application materials shall include a plan on the resolution of claims and liabilities during the restructuring
process.
Chapter III Business Scope
Article 31
Where a foreign-funded financial institution conducts, within the business scope as provided for by Article 17 or Article 18 of
the Regulation, foreign exchange businesses with overseas institutions, foreign-funded enterprises, permanent missions of foreign
countries in China, representative offices of Hong Kong, Macao or Taiwan in the Mainland, and foreigners and compatriots from Hong
Kong, Macao or Taiwan as well as some prescribed foreign exchange businesses with non-foreign-funded enterprises, it shall meet the
following applicable condition:
(1)
The working capital of the branch of a foreign bank shall not be less than the equivalent of RMB 100 million yuan in freely convertible
currencies;
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than the equivalent of RMB 300 million
yuan in freely convertible currencies;
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than the equivalent of RMB
100 million yuan in freely convertible currencies;
(4)
The registered capital of a wholly foreign-funded finance company or joint-equity finance company shall not be less than the equivalent
of RMB 200 million yuan in freely convertible currencies.
Article 32
Where a foreign-funded financial institution conducts foreign exchange businesses within the scope as provided for in Article 17
or Article 18 of the Regulation with various kinds of clients, it shall meet the following applicable condition:
(1)
The working capital of a branch of a foreign bank shall not be less than the equivalent of RMB 200 million yuan in freely convertible
currencies
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than the equivalent of RMB 400 million
yuan in freely convertible currencies,
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than the equivalent of RMB
100 million yuan convertible currencies;
(4)
The registered capital of a wholly foreign-funded finance company or joint-equity finance company shall not be less than the equivalent
of RMB 300 million yuan in freely convertible currencies.
Article 33
For a foreign-funded financial institution that meets the provisions of Article 20 of the Regulation and is allowed to undertake
the businesses as specified in Article 17 or Article 18 of the Regulation, it shall meet the following applicable condition when
applying for conducting foreign exchange businesses with overseas institutions, foreign exchange businesses and RMB businesses with
overseas institutions, foreign-funded enterprises, permanent missions of foreign countries in China, representative offices of Hong
Kong, Macao or Taiwan in the Mainland, and foreigners and compatriots from Hong Kong, Macao or Taiwan as well as some prescribed
foreign exchange businesses and RMB businesses with non-foreign-funded enterprises:
(1)
The working capital of a branch of a foreign bank shall not be less than RMB 200 million yuan, of which the capital in RMB shall not
be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent of 100 million yuan in freely
convertible currencies;
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 400 million yuan, of which
the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent of
RMB 300 million yuan in freely convertible currencies;
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 200 million yuan,
of which the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent
of 100 million yuan in convertible currencies;
(4)
The registered capital of a wholly foreign-funded finance company or a joint-equity finance company shall not be less than RMB 300
million yuan, of which the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less
than the equivalent of RMB 200 million yuan in freely convertible currencies.
Article 34
For a foreign-funded financial institution that meets the provisions of Article 20 of the Regulation and is allowed to undertake
the businesses as specified in Article 17 or Article 18 of the Regulation, it shall meet the following applicable condition when
applying for conducting foreign exchange businesses with all kinds of clients, RMB businesses with foreign-funded enterprises, permanent
missions of foreign countries in China, representative offices of Hong Kong, Macao or Taiwan in the Mainland, foreigners and compatriots
from Hong Kong, Macao or Taiwan as well as some prescribed RMB businesses with non-foreign-funded enterprises:
(1)
The working capital of a branch of a foreign bank shall not be less than RMB 300 million yuan, of which the capital in RMB shall not
be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent of 200 million yuan in freely
convertible currencies;
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 500 million yuan, of which
the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent of
RMB 400 million yuan in freely convertible currencies;
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 200 million yuan,
of which the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent
of 100 million yuan in freely convertible currencies;
(4)
The registered capital of a wholly foreign-funded finance company or a joint-equity finance company shall not be less than RMB 400
million yuan, of which the capital in RMB shall not be less than 100 million yuan and that a in foreign currency shall not be less
than the equivalent of RMB 300 million yuan in freely convertible currencies.
Article 35
For a foreign-funded financial institution that meets the provisions of Article 20 of the Regulation and is allowed to undertake
the foreign exchange businesses as specified in Article 17 or Article 18 of the Regulation with all kinds of clients, it shall
meet the following applicable condition when applying for conducting RMB businesses with foreign-funded enterprises, permanent missions
of foreign countries in China, representative offices of Hong Kong, Macao or Taiwan in the Mainland, foreigners and compatriots from
Hong Kong, Macao or Taiwan and non-foreign-funded enterprises:
(1)
The working capital of a branch of a foreign bank shall not be less than RMB 300 million yuan, of which the capital in RMB shall not
be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent of 200 million yuan in freely
convertible currencies;
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 600 million yuan, of which
the capital in RMB shall not be less than 200 million yuan and that in a foreign currency shall not be less than the equivalent of
RMB 400 million yuan in freely convertible currencies;
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 200 million yuan,
of which the capital in RMB shall not be less than 100 million yuan and that in a foreign currency shall not be less than the equivalent
of 100 million yuan in freely convertible currencies;
(4)
The registered capital of a wholly foreign-funded finance company or a joint-equity finance company shall not be less than RMB 500
million yuan, of which the capital in RMB shall not be less than 200 million yuan and that in a foreign currency shall not be less
than the equivalent of RMB 300 million yuan in freely convertible currencies.
Article 36
A foreign-funded financial institution that meets the provisions of Article 20 of the Regulation and is allowed to undertake the
businesses as specified in Article 17 or Article 18 of the Regulation shall meet the following applicable condition when applying
for conducting foreign exchange businesses and RMB businesses with all kinds of clients:
(1)
The working capital of a branch of a foreign bank shall not be less than RMB 500 million yuan, of which the capital in RMB shall
not be less than 300 million yuan and that in a foreign currency shall not be less than the equivalent of 200 million yuan in freely
convertible currencies;
(2)
The registered capital of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 1 billion yuan, of which
the capital in RMB shall not be less than 600 million yuan and that in a foreign currency shall not be less than the equivalent of
RMB 400 million yuan in freely convertible currencies;
(3)
The working capital of a branch of a wholly foreign-funded bank or a joint-equity bank shall not be less than RMB 300 million yuan,
of which the capital in RMB shall not be less than 200 million yuan and that in a foreign currency shall not be less than convertible
currencies equivalent of 100 million yuan in freely convertible currencies;
(4)
The registered capital of a solely foreign-funded finance company or joint-equity finance company shall not be less than RMB 700 million
yuan, of which the capital in RMB shall not be less than 400 million yuan and that in a foreign currency shall not be less than the
equivalent of RMB 300 million yuan in freely convertible currencies.
Article 37
The term “trade in government bonds, financial bonds, and other foreign exchange securities except stocks” as mentioned in Article
17 (4) and Article 18 (4) of the Regulation shall include, but not be limited to, the following foreign exchange investments such
as bonds of Chinese or foreign governm
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