Legislation roundup: Business environment, non-tax-resident treatment and Shanghai-Hong Kong Stock Connect

October 24, 2019 | BY

Susan Mok

China will set up a punitive damages system for intellectual property infringements, non-tax-resident enterprises may enjoy treatment available under agreements by self-determination and Shanghai-Hong Kong Stock Connect includes stocks with weighted voting rights.

Economic Policy

State Council, Regulations for Optimizing the Business Environment

国务院优化营商环境条例

The state shall establish a punitive damages system for intellectual property infringements, promote the establishment of a rapid and concerted intellectual property protection mechanism, improve the diversified intellectual property dispute resolution mechanism and intellectual property rights protection aid mechanism, and intensify efforts to protect intellectual property.

Further reading

PRC Foreign Investment Law

China's New Foreign Investment Law: Implications for the Future of FIEs

Recent Developments in PRC Foreign Investment, Cross-border Tech Transfer, and Trade Secrets Laws – Implications for Foreign IP Owners

Tax

State Administration of Taxation, Measures for the Administration of the Enjoyment by Non-Tax-Resident Taxpayers of the Treatment Available Under Agreements

国家税务总局非居民纳税人享受协定待遇管理办法

The enjoyment by non-tax-resident taxpayers of the treatment available under agreements shall be handled on a "self-determination, filing of enjoyment and retention of relevant documentation for future reference" basis. Where a non-tax-resident taxpayer himself/herself determines that he/she satisfies the conditions for enjoying the treatment available under an agreement, he/she may avail himself/herself of such treatment at the time of tax filing or, through his/her withholding agent, at the time of withholding filing, and shall additionally collect and retain the relevant documentation for future reference in accordance with the Measures and submit to follow-up administration by the tax authority.

Further reading

Announcement on an Issue Relevant to the Payment of Enterprise Income Tax by Non-tax-resident Enterprises Involved in the Pilot Projects for the Levy of Value-added Tax in Place of Business Tax

PRC Enterprise Income Tax Law (Revised)

Capital Markets

Shanghai Stock Exchange, Implementing Measures for Shanghai-Hong Kong Stock Connect Related Matters (Amended in 2019)

上海证券交易所沪港通业务实施办法 (2019年修订)

When first being included as a southbound trading stock under the Shanghai-Hong Kong Stock Connect, the stock of a company with a weighted voting rights structure shall have been listed on the Hong Kong Stock Exchange for six months and the subsequent 20 Hong Kong stock trading days.

Further reading

Several Provisions on the Mechanisms to Provide Mutual Trading Access Between the Mainland and Hong Kong Stock Markets

Guidelines on the Participation in Trading Through the Shanghai-Hong Kong Stock Connect by Publicly Offered Securities Investment Funds

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