Profit Repatriation: A Look at a Dividend Payment Strategy

Top among the concerns you may have setting up a business in China, is how you are going to send profits back to your parent company. There are a few main paths to remitting profits, such as dividends, intercompany transactions, and offshore loans.

Each method comes with its own considerations. What may be relatively straightforward in your own country, could pose more challenging in China.  The method you ultimately choose could affect how your business is structured to achieve maximum tax efficiency and therefore is an important aspect to consider early on in your entry strategy. 

In this short, six-minute video Hannah Feng, Tax Partner in Beijing, discusses using dividend payments to send money back to the parent company including how they work, the implications of this method, and withholding tax.

If you have any questions regarding a dividend payment strategy or repatriating your profits, please contact China@dezshira.com.

To explore another remittance method, watch “Profit Repatriation: Intercompany Payment Potential Advantages and Implications” for an explanation of intercompany payments in China.