China’s regulatory environment has entered a phase where legal structure alone is no longer sufficient. Authorities are placing increasing emphasis on whether business arrangements reflect genuine economic substance, particularly in cross border group structures involving holding entities, service centres and intellectual property arrangements. In 2026, this shift is being driven by stronger tax enforcement, deeper data integration across government systems and a clear policy

For companies operating in China, annual audit requirements are a core part of the regulatory framework. Whether a business is a wholly foreign-owned enterprise, joint venture, or domestic company, statutory audit and reporting obligations are closely linked to tax compliance, foreign exchange control, and corporate governance. In 2026, enforcement has become more structured, with greater coordination between tax authorities, auditors, and regulatory bodies. Businesses are ex

China continues to refine its approach to attracting and retaining international talent, with regional governments playing an increasingly active role in shaping practical policy frameworks. In 2026, the Guangzhou–Foshan metropolitan area has introduced a new set of foreign talent measures designed to simplify work permit procedures and enable smoother cross-city mobility within the Greater Bay Area. These reforms are not isolated administrative updates. They reflect a broade

China remains one of the most commercially attractive markets globally, but entering in 2026 requires a far more structured and compliance-led approach than in previous years. Regulatory expectations have increased, enforcement is more consistent, and the gap between well-prepared businesses and those entering without a clear strategy is becoming more visible. For overseas companies, success is no longer determined by speed of entry. It is determined by how well commercial ob

For companies operating in China as part of an international group, one of the most common challenges is navigating the differences between China Accounting Standards (CAS) and International Financial Reporting Standards (IFRS). While CAS has moved closer to IFRS over the years, important differences remain that can affect financial reporting, tax calculations and group consolidation. Understanding these differences is not only a technical requirement. It is essential for ens

China’s 2026 “Two Sessions” opened with a notable shift in tone and positioning. In his Government Work Report, Premier Li Qiang announced a GDP growth target range of 4.5%–5%, marking a continued move away from single-point targets toward a more flexible, range-based approach. This adjustment is not simply technical. It reflects a deeper recalibration of China’s economic priorities, acknowledging external uncertainty while reinforcing a long-term transition toward sustainabl

China’s Ministry of Industry and Information Technology has introduced updated measures governing the certification and review of technology contracts. The new framework, effective from 1 March 2026, reshapes how agreements relating to technology development, transfer, licensing, consulting and technical services are examined and recognised. For businesses operating in China’s technology sector or engaging in cross-border technology cooperation, the revised rules bring greate

China’s 2026 Value-Added Tax (VAT) Law introduces a more structured framework for determining when VAT obligations arise. One of the most notable changes is the clarification and adjustment of VAT thresholds, including new rules governing monthly and quarterly reporting as well as specific per-transaction thresholds. For foreign enterprises operating in China, trading with Chinese counterparties, or managing China-related supply chains, these changes affect how and when VAT l

China is moving steadily toward a more structured and enforceable Environmental, Social and Governance reporting framework. What was previously a mix of voluntary disclosures and sector-specific requirements is evolving into a more formalised system with clear expectations for large enterprises and foreign invested entities. In 2026, ESG reporting is no longer viewed as a reputational exercise. It is becoming a regulatory requirement closely linked to financial reporting, cor

For companies operating in China, one of the most common sources of confusion is the relationship between China Accounting Standards, often referred to as CAS, and China’s tax laws. While both frameworks deal with the financial position and activities of a business, they do not serve the same purpose and they do not always produce the same result. This distinction matters. A company may prepare financial statements that are fully compliant with CAS and still need to make mult

Hong Kong’s network of Comprehensive Avoidance of Double Taxation Agreements (DTAs) continues to expand, reinforcing the city’s position as a leading international business and financial centre. As of 2026, Hong Kong has reached a new milestone in the development of its treaty network, with additional agreements signed, several entering into force, and further negotiations underway. For international businesses using Hong Kong as a regional headquarters, holding structure, or

Shenzhen has introduced stricter enforcement of age thresholds for foreign work permit renewals, with new measures taking effect in 2026. Under the updated approach, applicants aged 60 and above applying under Category B or Category C work permits are now significantly more likely to face rejection when seeking renewals. The development reflects a broader effort by Chinese authorities to standardise employment policies for foreign nationals while reinforcing workforce managem

China has intensified enforcement of salary-based requirements for foreign work permits, affecting both new applications and permit renewals. The updated enforcement approach places greater emphasis on salary thresholds as a key factor in determining eligibility for foreign employment. For companies employing foreign professionals in China, the development signals increased scrutiny of compensation levels and documentation, alongside broader compliance obligations linked to w

China’s Personal Information Protection Law (PIPL) continues to evolve as one of the most significant regulatory frameworks affecting businesses operating in the country. In 2026, recent developments have reinforced the government’s focus on data security, cross-border data control and corporate accountability. For foreign invested enterprises, this has translated into a measurable increase in compliance obligations and operational complexity. What was initially viewed as a d

China’s accounting framework is built on a centrally developed and tightly regulated system that reflects both international alignment and domestic policy priorities. For companies operating in China, understanding how accounting standards are adopted and applied is essential for ensuring compliance, accurate reporting and effective coordination with global group structures. In 2026, China Accounting Standards continue to evolve, with ongoing convergence toward international

Chinese New Year remains the most significant holiday period in Mainland China, with material impact on workforce availability, supply chains and regulatory processing timelines. For 2026, businesses operating in or trading with China should begin preparation well in advance to mitigate disruption and protect operational continuity. For foreign-invested enterprises, regional headquarters and trading companies, proactive planning is essential to manage workforce absence, produ

For foreign-invested enterprises and domestic companies operating in China, geographic expansion often raises a fundamental question: should a new legal entity be established in each city, or is a branch office the more efficient structure? Once a Limited Liability Company has been incorporated in China, establishing branch offices is typically the most straightforward and cost-effective method of expanding operations across different cities. Compared to setting up a new comp

China’s economy recorded 5.0% GDP growth in 2025, meeting official policy targets despite continued structural pressures and a complex global backdrop. The result reflects a combination of fiscal support, industrial policy direction and targeted stabilisation measures, rather than broad-based cyclical acceleration. For international investors and foreign-invested enterprises operating in China, the headline growth figure is less important than understanding the composition an

Shenzhen’s rapid commercial pace brings opportunity alongside close regulatory attention. For foreign invested enterprises, day to day operations must align with tax rules, VAT administration and local compliance standards that are actively enforced. Businesses that treat compliance as a background task often face disruption during audits, banking reviews or corporate changes. This article explains how to manage tax, VAT and ongoing compliance when operating in Shenzhen, with

Shenzhen has developed one of the most active employment markets in Mainland China, driven by technology, manufacturing, professional services and international trade. For foreign invested enterprises, managing people in Shenzhen requires a clear understanding of local labour rules, payroll mechanics and mandatory social insurance. Missteps in these areas often lead to disputes, penalties or operational disruption. This article outlines the practical human resources and payro