Due Diligence
6
July 2018

What Information is Available from a Chinese Annual Return?

Viewing information declared on a Chinese annual return is a useful method to learn more about a company from China.

As in other countries, Chinese companies are required to make an annual return to the tax authorities to report their business performance and financials, alongside other key details.

In this article we look at what information from a Chinese annual return is made publicly available by the authorities.

What is a Chinese Annual Return?

All companies registered in Mainland China are required to lodge an annual tax return to the State Administration of Taxation (SAT) to report their business finances and actualities. 

For most companies this information must be submitted by a registered Chinese tax accountant who has audited the company's accounts.

In China the financial year runs from 1 January to 31 December and companies have until 30 June the following year to make their submission, otherwise they will be marked as having abnormal business operations until the issue is resolved.

In addition to financials, companies must also report significant changes to the company's structure & shareholders, as well as providing contact details and more.

Information Available from a Chinese Annual Return

Information from a Chinese annual return is available by accessing the company's registration records on China's National Enterprise Credit Information Publicity System which is run by the Administration for Industry and Commerce (AIC).

Depending on the company, records are usually available on the system for each annual return going back to 2013.

It is important to be aware that the information contained within a Chinese annual return is declared by the company itself and the AIC system makes a point of stating that "the company is responsible for the information's validity and legality".

The information made available is contained under the following section headers:

Basic Information

This specifies the company's basic registration and operations information. Many people find the contact details and the company's description of their main business activities here useful.

  • Registration Number (a.k.a. Unified Social Credit Code)
  • Contact Address
  • Phone Number
  • Number of Employees
  • Business Status
  • Whether or not has Investment
  • Whether or not has Guarantees
  • Main Business Activities
  • Company Name
  • Postcode
  • Email Address
  • Number of Female Employees
  • Controlling Interest Type
  • Whether or not has Websites
  • Whether or not has Shareholding Changes


Website Information

If the company has declared any websites, they will also be listed on the annual return.

  • Website Name
  • Type (website / online shop)
  • URL


Shareholder Information

Details of each shareholder and their shareholding at the end of the financial year, should be declared.

(from left to right)

  • Number
  • Shareholder Name
  • Subscribed Capital Amount
  • Subscription Date
  • Subscription Form
  • Paid-up Capital Amount
  • Payment Date
  • Payment Form


Investment Information

When the company has invested in another entity these details should be declared.

  • Name of Invested Company
  • Invested Company Registration Number

Company Financial Status

Although Chinese companies are required to submit financial information when making their annual returns, they also have the choice whether or not to make this information publicly available.

The result of this is that very few companies choose to make their financials publicly available – less than 1% in our experience. If they do, figures are always presented in CNY.

  • Total Assets
  • Total Operating Income
  • Income from Main Operations
  • Total Tax Paid
  • Total Owners’ Equity
  • Total Profit
  • Net Profit
  • Total Liabilities


External Guarantees Information

Details of guarantees made to, or received from, other entities.

(from left to right)

  • Number
  • Name of Creditor
  • Name of Debtor
  • Type of Debt Owed to Main Creditors
  • Amount of Debt Owed to Main Creditors
  • Debt Repayment Deadline
  • Guarantee Period
  • Guarantee Form


Changes to Shareholdings

Any changes to a company's shareholders should be declared and displayed here.

  • (from left to right)
  • Number
  • Shareholder Name
  • Previous Shareholder Holding
  • Current Shareholder Holding
  • Date of Shareholding Change


Social Security Information

This section lets you know the number of employees the company pays social security for, and the amounts they should pay, have agreed to pay and have already paid. 

Usually this information isn't made publicly available, however.

  • Employees with endowment insurance
  • Employees with medical insurance
  • Employees with maternity insurance
  • Employees with unemployment insurance
  • Employees with workplace injury insurance
  • Enterprise payment base (minimum amount)
  • Payment base for endowment insurance
  • Payment base for unemployment insurance
  • Payment base for medical insurance
  • Payment base for maternity insurance
  • Actual payment amount
  • Payment amount for endowment insurance
  • Payment amount for unemployment insurance
  • Payment amount for medical insurance
  • Payment amount for workplace injury insurance
  • Payment amount for maternity insurance
  • Payments due
  • Payment due for endowment insurance
  • Payment due for unemployment insurance
  • Payment due for medical insurance
  • Payment due for workplace injury insurance
  • Payment due for maternity insurance


Amendment Record

If any changes have been made to the annual return they will be specified here.

(from left to right)

  • Number
  • Amended Item
  • Before Amendment
  • After Amendment
  • Amendment Date


How Can I Get Information from a Chinese Annual Return?

If you are unable to retrieve and translate the information yourself, check out China Checkup's China Full Scope Verification report.

This comprehensive report gives you an unprecedented insight into a Mainland China company, including details from their most recent annual return.



 



Further reading