Three departments release tax policy for overseas investors to offset profit distribution for direct investment.

Announcement on Tax Exemption Policy for Overseas Investors Reinvesting Profits Announcement No. 2 of 2025 by the Ministry of Finance, State Administration of Taxation, Ministry of Commerce In order to implement the decisions and arrangements of the Party Central Committee and the State Council, and in accordance with the relevant provisions of the Enterprise Income Tax Law and its implementing regulations, the following tax preferential policies related to overseas investors reinvesting profits directly are hereby announced: 1. Overseas investors who use profits distributed by Chinese resident enterprises for domestic direct investment between January 1, 2025 and December 31, 2028, and meet the conditions for domestic direct investment, may be offset 10% of the overseas investors' annual tax payable based on the amount of investment. Any unused offset amount in a year can be carried forward to subsequent years. For dividends, profits, and other equity investment income as stipulated in tax treaties between the People's Republic of China and foreign governments with tax rates lower than 10%, the treaty tax rate shall be applied. The rest of the announcement details the conditions and procedures for overseas investors to benefit from this tax exemption policy when reinvesting profits in China.