Hainan Company Annual Inspection

Hainan company annual inspection is a legal requirements. In China, there is an annual inspection done by the Statement Administration for Industry and Commerce (“SAIC”) for every registered company. That is to say, annual Inspections are mandatory for all companies registered in China. A company that fails to conduct the annual inspection will incur adverse impact and severe punishment. The time period for annual inspection is from 1st March to 30th June every year.

For the foreign invested companies, including sino-foreign joint venture enterprises and wholly foreign owned enterprises, the annual financial report submitted to the AIC is required to be audited by an independent CPA firm.

Annual Inspection in China
Foreign invested enterprises (FIEs) in China are required to undergo an annual cooperative inspection jointly conducted by several governmental departments of the State Council. These inspections are designed to ensure that FIEs conducting businesses in China are fulfilling the legal commitments they make to each of the departments. Each year from March to the end of June, the annual inspection is jointly hosted by the following governmental departments:

(1) Ministry of Commerce (MOFCOM);
(2) Ministry of Finance (MoF);
(3) Administration of Industry and Commerce (AIC);
(4) State Administration of Taxation (SAT);
(5) State Administration of Foreign Exchange (SAFE);
(6) Statistical Bureau.

Note that the annual inspection required by the SAT is only a review of the tax registration certificate, and is different from the CIT reconciliation. The inspections of AIC and SAFE (see below) are usually more complicated than others and may require additional separate procedures being conducted. Regional variances also exist. Wholly foreign owned enterprises (WFOEs) with branches should pay special attention to ensuring that their branches also undergo annual inspection.

The relevant documents required for the annual inspection are as follows:
(1) Annual inspection report;
(2) Audit report issued by external accounting firm;
(3) Financial statements of the previous year;
(4) Certificate of approval for FIEs;
(5) Business license;
(6) Capital verification report;
(7) Industry-specific license or permit;
(8) Financial registration certificate;
(9) Tax registration certificate;
(10) Other forms or documentation required by relevant government departments.

The above mentioned procedures and required materials are for the general case. For specific and detailed information, please directly contact Tannet’s consultants, as each case may vary more or less. Our professional team endeavor to provide the best and wide spectrum of corporate services for you.

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