[Q&A] Beneficial Owner Registration: What You Need to Know

2025. 11. 6

Question: Recently, our company was notified by our bank to register our beneficial owner. What is a beneficial owner?
Answer: The beneficial owner you are referring to likely relates to the requirement under the Measures for the Administration of Beneficial Owner Information, jointly issued by the People's Bank of China and the State Administration for Market Regulation in April 2024. This requires your company to report its beneficial owner information through the market regulation authority's system.
In fact, this requirement was initially mentioned in Article 9 of the Regulations on the Registration and Filing of Market Entities, which states:
"The following matters of market entities shall be filed with the registration authority:
…
(8) Information on the beneficial owner(s) of market entities such as companies and partnerships;"
However, neither the Regulations nor their implementing rules provided specific guidance on how to report beneficial owner information. Therefore, the aforementioned Measures were jointly issued in April 2024.
According to these Measures, a beneficial owner refers to the individual who ultimately owns or actually controls the filing entity, or who enjoys the ultimate benefits from the filing entity, and this information must be filed for a natural person.

Question: How should we determine who the beneficial owner is?
Answer: This depends on the specific circumstances:
1.General Companies: A natural person who, directly or indirectly, holds 25% or more of the company's equity or shares; or a natural person who, although holding less than 25% of the shares, actually enjoys 25% or more of the profit rights or voting rights; or a natural person who, although not meeting the above two criteria, can actually control the filing entity alone or jointly through agreements or other arrangements.
If no such natural person can be identified—for example, if the company's shareholder is a listed company and no natural person can be found who directly or indirectly holds 25% or more of the equity, shares, or beneficial interests (such as in cases of widely dispersed shareholding)—then the person responsible for the day-to-day management of the filing entity may be reported as the beneficial owner.
2.Representative Offices of Foreign Companies in China: The natural person identified as the beneficial owner of the foreign company under point (1) above, or the responsible person of the representative office in China, may be reported as the beneficial owner.

Question: If our company is a wholly foreign-owned enterprise, do we need to trace back to the shareholders of the overseas parent company?
Answer: Strictly following the regulations, if your overseas parent company is controlled by natural persons, it is indeed necessary to trace back to the shareholders of the overseas parent company.
However, in current practice, based on the author's understanding, for foreign-invested enterprises—especially where the overseas parent is a listed company—it is entirely feasible to initially report the directors or senior management personnel who are actually responsible for operations and management as the beneficial owners (referring to guidance from banking institutions).

Question: Why is this requirement being raised now?
Answer: Although the Measures for the Administration of Beneficial Owner Information were promulgated and came into effect in April 2024, they also stipulate that companies established prior to this date may complete the beneficial owner information filing no later than November 1, 2025. Therefore, it is understandable that your company is now encountering this requirement.

Question: What are the consequences of failing to complete the filing on time?
Answer: If the filing is not completed on time, the company may be ordered to make corrections within a specified period. Failure to make corrections within the deadline may result in a fine of up to RMB 50,000. Additionally, please note that, referring to the Measures for the Identification of Customer Beneficial Owners by Financial Institutions (Draft for Comments) issued by the People's Bank of China in October 2025, financial institutions such as banks will treat the verification, identification, and management of customer beneficial owner information as an important measure to prevent money laundering and other illegal activities. Therefore, even if no penalty is imposed, failure to complete the filing may adversely affect the company's banking operations (for example, the bank may refuse to process certain transactions due to an inability to verify beneficial owner information).