Notice of the State Administration of Taxation on Issues Concerning the Identification of Overseas Chinese-Funded Enterprises as Resident Enterprises Based on the Standard of Actual Management Institutions" (Guo Shui Fa [2009] No. 82)

The notice stipulates that overseas Chinese-funded enterprises that simultaneously meet the following conditions shall be identified as resident enterprises with actual management institutions within China (hereinafter referred to as non-domestically registered resident enterprises) in accordance with Article 2, Paragraph 2 of the "Enterprise Income Tax Law" and Article 4 of the "Implementation Regulations of the Enterprise Income Tax Law." They shall be subject to corresponding tax administration, and enterprise income tax shall be levied on their income sourced from both within and outside China. The conditions are:

1. The location where high-level management personnel and departments responsible for the day-to-day production and operation management of the enterprise perform their duties is mainly within China.
2. Financial decisions (such as borrowing, lending, financing, financial risk management, etc.) and personnel decisions (such as appointments, dismissals, and compensation, etc.) of the enterprise are made by institutions or individuals located within China or require approval from institutions or individuals located within China.
3. The enterprise's main assets, accounting books, company seals, and minutes of board and shareholder meetings, etc., are located or stored within China.
4. More than half (including half) of the directors or high-level management personnel with voting rights of the enterprise reside in China.