People's Bank of China Decree [2024] No. 3 of the State Administration for Market Regulation

Measures for the Management of Beneficial Owner Information

People's Bank of China Decree [2024] No. 3 of the State Administration for Market Regulation

April 30, 2024

　The Measures for the Management of Beneficial Owner Information have been deliberated and approved by the Executive Council of the People's Bank of China, reviewed and signed by the State Administration for Market Regulation, and approved by the State Council, and are hereby promulgated to take effect on November 1, 2024.

Pan Gongsheng, Governor of the People's Bank of China

Luo Wen, Director of the State Administration for Market Regulation

April 29, 2024

Measures for the Management of Beneficial Owner Information

　　Article 1 These Measures are formulated in accordance with the relevant laws and administrative regulations on anti-money laundering and enterprise registration management, so as to increase market transparency, maintain market order and financial order, and prevent and curb money laundering and terrorist financing activities.

　　Article 2 The following entities (hereinafter collectively referred to as filing entities) shall, in accordance with the provisions of these Measures, file beneficial owner information through the relevant registration system:

　　(1) the company;

　　(2) partnerships;

　　(3) Branches of foreign companies;

　　(4) Other entities as provided for by the People's Bank of China and the State Administration for Market Regulation.

　　Individually-owned businesses do not need to file beneficial owner information.

　　Article 3 If the registered capital (capital contribution) does not exceed 10 million yuan (or equivalent in foreign currency) and all shareholders and partners are natural persons, if there is no natural person other than shareholders or partners who actually controls it or obtains benefits from it, nor does it exercise control over it or obtains income from it through means other than equity or partnership interests, it shall be exempted from filing beneficial owner information after commitment.

　　Article 4: The State Administration for Market Regulation coordinates and guides the establishment of relevant registration systems, guides local registration organs to carry out beneficial owner information filing efforts in accordance with law, and promptly sends aggregated beneficial owner information to the People's Bank of China. The local market regulation departments at the county level or above are urging filing entities to promptly file beneficial owner information.

　　The People's Bank of China has established a beneficial owner information management system to receive, preserve and process beneficial owner information in a timely manner. The People's Bank of China and its branches urge filing entities to accurately record beneficial owner information.

　　Article 5: The People's Bank of China and its branches are to provide guidance for the filing of beneficial owner information, and the market regulatory departments are to cooperate.

　　Article 6 A natural person who meets one of the following conditions is the beneficial owner of the filing entity:

　　(1) Ultimately owning more than 25% of the equity, shares, or partnership interests of the filing entity through direct or indirect means;

　　(2) Although the first criterion is not met, the filing entity ultimately enjoys more than 25% of the income rights and voting rights;

　　(3) Although the first criterion is not met, the filing entity is actually controlled, either individually or jointly.

　　"Actual control" as used in item (3) of the preceding paragraph does not include the implementation of control through means such as agreements or close relationships, such as deciding on the appointment and removal of legal representatives, directors, supervisors, senior managers, or executive partners, deciding on the formulation or implementation of major business or management decisions, deciding on financial revenues and expenditures, and actually controlling and using important assets or major funds for a long time.

　　Where there are no of the three circumstances provided for in the first paragraph, the persons responsible for daily operation and management of the filing entity shall be deemed to be the beneficial owners for filing.

　　Article 7 A wholly state-owned company or a state-owned holding company shall treat the legal representative as the beneficial owner for filing.

　　Article 8 The beneficial owners of a branch of a foreign company shall be the beneficial owner of the foreign company in accordance with the provisions of Article 6 of these Measures, as well as the senior management of the branch.

　　The beneficial owner declaration exemption standard enjoyed by foreign companies in their home country does not apply to China.

　　Article 9 When establishing and registering, the filing entity shall record the beneficial owner information through the relevant registration system.

　　If it is not possible to handle the establishment registration through the relevant registration system, it can be handled on-site and the beneficial owner information shall be filed through the relevant registration system within 30 days from the date of establishment and registration.

　　Article 10: Where there is a change in the beneficial owner information of the filing entity, or it no longer meets the conditions for exemption from reporting as provided for in Article 3 of these Measures, it shall file the beneficial owner information through the relevant registration system within 30 days from the date of the change or does not meet the conditions for exemption from reporting.

　　Article 11: When filing the beneficial owner information, the filing entity shall fill in the following information:

　　(1) Name;

　　(2) gender;

　　(3) nationality;

　　(4) Date of birth;

　　(5) The address of the habitual residence or work unit;

　　(6) Contact information;

　　(7) The type, number, and expiration date of the identity document or identification document;

　　(8) The type of beneficial ownership relationship, as well as the date of formation and termination (if any).

　　If there are any circumstances specified in Item 1 of Paragraph 1 of Article 6 of these Measures, the proportion of equity, shares or partnership interests held shall also be reported; if there are circumstances specified in Item 2 of Paragraph 1 of Article 6 of these Measures, the proportion of income rights and voting rights shall also be reported; and if there are circumstances specified in Item 3 of Paragraph 1 of Article 6 of these Measures, the method of actual control shall also be reported.

　　Article 12: As needed to perform their duties, relevant state organs may obtain beneficial owner information from the People's Bank of China in accordance with law.

　　When financial institutions and specified non-financial institutions fulfill their anti-money laundering and counter-terrorism financing obligations, they can inquire about beneficial owner information through the People's Bank of China.

　　Relevant state organs, as well as financial institutions and specified non-financial institutions, shall keep confidential the beneficial owner information obtained in accordance with law.

　　Article 13: Where relevant state organs, financial institutions, or specified non-financial institutions discover that there are errors, inconsistencies, or incompleteness in the beneficial owner information management system of the filing entity, they shall promptly give feedback to the People's Bank of China. The People's Bank of China may take measures to verify the situation in accordance with law, and the filing entity shall cooperate.

　　For filing entities that have a significant impact on market transparency and financial transparency, the People's Bank of China and other competent authorities may require them to provide additional materials on equity, partnership interests, income rights, voting rights, control relationships, and other information required to determine the beneficial owner.

　　Article 14: Where the filing entity fails to handle the filing of beneficial owner information in accordance with provisions, it shall be handled in accordance with the relevant administrative regulations on enterprise registration management.

　　Where the People's Bank of China and its branches discover that the beneficial owner information filed by the filing entity is inaccurate, they shall order the filing entity to make corrections within a time limit; if they refuse to make corrections, they shall impose a fine of not more than 50,000 yuan.

　　Article 15 The term "beneficial owner" as used in these Measures refers to a natural person who ultimately owns or actually controls the filing entity, or enjoys the ultimate income of the filing entity.

　　Article 16: Filing entities that have been registered before the implementation of these Measures shall file beneficial owner information in accordance with the provisions of these Measures before November 1, 2025.

　　Article 17: These Measures take effect on November 1, 2024.

"Measures for the Management of Beneficial Owner Information" answers questions from reporters

Q: What is the purpose and significance of the promulgation of the "Administrative Measures"?

A: In order to enhance market transparency, maintain market order and financial order, and prevent and curb money laundering and terrorist financing activities, in accordance with the relevant laws and administrative regulations on anti-money laundering and enterprise registration management, and with the approval of the State Council, the People's Bank of China and the State Administration for Market Regulation have promulgated the Measures for the Administration of Beneficial Owner Information (hereinafter referred to as the "Administrative Measures"), which make specific provisions on the filing and management of beneficial owner information.

From a domestic point of view, the establishment of a beneficial owner information filing system is a major measure to optimize the business environment in the mainland. The mainland has disclosed the information on the main shareholding structure of enterprises to the public in the enterprise credit information publicity system, and promoted the construction of a beneficial owner information filing system, which can more clearly and unambiguously reflect the equity structure of companies and other entities, as well as the ultimate control and benefits, improve market transparency, enhance information symmetry and mutual trust between business entities, improve transaction security and transaction efficiency, and further optimize the business environment in mainland China. At the same time, the beneficial owner information filing system will help prevent violations such as shell companies, false capital injections and nested shareholdings at the source, help crack down on illegal and criminal activities such as telecommunications network fraud, and help prevent and curb corruption.

From an international point of view, the centralized filing of beneficial owners has become an international standard requirement and an international common practice. The Group of Twenty (G20) has been pushing for greater transparency of beneficial ownership, and the World Bank has included the beneficial owner registration system as an important indicator in the Doing Business assessment, and the Financial Action Task Force (FATF) has also included it as an important indicator in the international assessment of anti-money laundering. At present, the world's major economies have established such a system.

Q: Which entities need to file beneficial owner information?

A: Companies, partnerships and branches of foreign companies are the "filing entities" currently stipulated in the Administrative Measures. Individually-owned businesses do not need to file beneficial owner information. Non-corporate enterprise legal persons, sole proprietorship enterprises, professional farmer cooperatives (cooperatives) and their branches, as well as branches of domestic companies and partnership enterprises are temporarily exempt from filing with beneficial owners.

Q: What is a "beneficial owner" and how is a "beneficial owner" determined?

Answer: The beneficial owner refers to the natural person who ultimately owns or actually controls the filing entity, or enjoys the ultimate benefits of the filing entity.

Article 6 of the Administrative Measures sets out in detail the criteria for identifying beneficial owners. A natural person who meets one of the following criteria is the beneficial owner of the filing entity:

Criterion 1: A natural person who ultimately owns more than 25% of the equity, shares or partnership interests of the filing entity through direct or indirect means.

Criterion 2: A natural person who does not meet criterion 1 but ultimately enjoys more than 25% of the income rights and voting rights of the filing entity.

Criterion 3: A natural person who does not meet criterion 1 but exercises actual control over the filing entity alone or jointly.

There may be more than one beneficial owner, and any natural person who meets one of the above three criteria should be filed as a beneficial owner. If the beneficial owner cannot be identified through the above criteria, the person responsible for the day-to-day operation and management shall be deemed to be the beneficial owner.

Beneficial owners have similarities with the "actual controller" under the Companies Act, but they are different. First of all, beneficial ownership includes three aspects: ownership, control and income, and the beneficial owner can be the owner of the company (partnership), the controller and beneficiary of the company (partnership). Second, the beneficial owner needs to penetrate into the natural person. The "actual controller" can be either a legal person or a natural person, and the beneficial owner is a natural person. When identifying the beneficial owner, it is necessary to "penetrate layer by layer" to the natural person who ultimately owns and actually controls the filing entity or enjoys its ultimate benefits.

Q: What measures will the People's Bank of China take to facilitate filing entities, especially micro, small and medium-sized enterprises, to fill in the beneficial owner information?

A: For most filing entities, the beneficial owner is a natural person who ultimately holds more than 25% of the shares, and only filing entities with complex equity arrangements need to be identified one by one in accordance with the standards stipulated in the Administrative Measures. For entities with complex equity (partnership interests) structures, the People's Bank of China (PBoC) will issue the Guidelines for the Filing of Beneficial Owner Information to provide guidance for their filing work.

In order to simplify the reporting process for micro, small and medium-sized enterprises, the Administrative Measures stipulate a simplified measure of "exemption from reporting", and eligible micro, small and medium-sized enterprises can be exempted from further filling in the beneficial owner information by reading the letter of commitment in the system and checking the confirmation.

After the issuance of the Administrative Measures, the People's Bank of China will provide online service guides in a timely manner to facilitate the public and enterprises to understand the relevant policies, and announce the consultation telephone numbers of various localities to answer the difficult questions encountered by the filing entities in filling in the application through telephone consultation.

Q: How do the Administrative Measures consider the provisions on the protection of beneficial owners' information?

A: From an international perspective, the mainland has adopted relatively prudent requirements for the information security and privacy protection of beneficial owners. The international policies on the management of beneficial owner information can be roughly divided into two categories, one is to treat the beneficial owner information as public information, which can be publicly inquired by the whole society, such as the United Kingdom, and the other is to treat it as non-public information, which is only available to government departments and anti-money laundering agencies in the performance of their statutory duties, such as the United States, Singapore, etc. The mainland adopts the second type of policy, emphasizing the confidentiality of information and clarifying that the information of the beneficial owners filed is not disclosed to the public, which is detailed in Article 12 of the Administrative Measures.