Once a representative office or WFOE is set up and registered in China, it is necessary to maintain proper records and accounts in line with Chinese accounting laws and principles. Periodic reporting of accounts and tax to authorities needs to be made. A full annual audit is also required of every company registered in China, including all forms of Foreign Invested Enterprise (FIE). For an FIE this is vital – as it is a pre-requisite for being able to start the repatriation of profit process.
This is no different to requirements in most countries – and accounting of course is nothing new! But without doubt, adapting to the rules and standards of tax and accounting in China is not straightforward.