Dividends are the standard repatriation route: pay 10% withholding tax (5% with HK treaty holding ≥25%), complete CIT pre-payment and annual clearance, then remit through the bank with tax certificates. Loss-offset and capital reduction routes exist for special cases.
Clean dividend path: (1) Company must have distributable profits per PRC GAAP books (after 10% statutory reserve until 50% of capital). (2) Shareholder resolution allocating dividends. (3) Withholding tax: 10% default for foreign shareholders; 5% if paid to a HK company holding ≥25% with a Tax Residency Certificate (beware PPT/anti-treaty-shopping substance checks). (4) Bank remittance requires: tax payment certificates (withholding receipts), board resolution, audited statements. (5) Timing: dividends usually declared after annual CIT reconciliation (May-June for prior year). (6) Alternatives: service fees (arm's length, TP documentation), royalty (IP registered with China trademark/copyright authorities), capital reduction (creditor procedure), liquidation. Route planning before year-end avoids the tax certificate logjam.
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