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ODI Filing

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What is an ODI offshore investment filing?

Overseas Direct Investment (Overseas Direct Investment) refers to the behavior of domestic enterprises and groups to acquire overseas ownership, control, management and other related interests through establishment, merger and acquisition, and participation in shares, etc., after approval by relevant departments. Commonly applicable situations include:

1. Offshore newly established company: refers to the enterprise to establish a new company outside the country, and the mainland companies as shareholders, shareholding ratio has no specific requirements.

2. Offshore merger and acquisition of companies: This refers to the acquisition by an enterprise of control or management of an already existing company by means of the purchase of equity or assets abroad.

When is an ODI filing required?

Overseas listing (Red Chip/VIE structure construction)

ODI filing for companies with red chip structure or VIE structure can help enterprises to complete the pre-listing preparation work more smoothly, and also facilitate future capital operation and investment exit.
Establishment of overseas subsidiaries for business operations and capital injection

When a domestic company establishes a subsidiary overseas, in order to open a local bank account or carry out the operation of remittance from the mainland to overseas, the domestic parent company is required to provide an ODI filing certificate.
Cross-border e-commerce business development

When a cross-border e-commerce company makes a large amount of funds out of the country, through ODI filing, the company can obtain approvals from the Ministry of Commerce and the Development and Reform Commission, thus ensuring the legitimacy of the funds out of the country.
Establishment of foreign-invested enterprises

When a Chinese enterprise first establishes a subsidiary overseas and then repatriates funds through that subsidiary to set up a Wholly Foreign Owned Enterprise (WFOE) or other form of foreign enterprise in China, it is required to apply for an ODI filing certificate when it opens a capital account.
Other situations

Individuals and corporations will also need to make ODI offshore investment filings for tax harmonization and offshore investments.

Requirements for ODI outbound investment filing

If 1, 2 and 3 are not satisfied, you can also make paid-in registered capital, but the paid-in amount should be greater than the investment capital.

Processing Flow of ODI Outbound Investment Filing

1

Step 1

Project establishment

Shareholders of domestic enterprises apply for projects and submit project information to the Development and Reform Department;
2

Step 2

approve and issue certificates

Issuance of the Certificate of Enterprise Overseas Investment, and investment outside the country for 2 years after receipt of the certificate;
3

Step 3

Final filing

Banks release foreign exchange, and OFAC supervises. For investment amount of more than 5 million dollars, it is necessary to report to the foreign control department. The foreign exchange control department will issue the Foreign Exchange Registration Certificate for Overseas Direct Investment to the domestic enterprise after examination.

Q&A Frequently Asked Questions

1. Is there a limit to the use of funds after the ODI is filed?

Yes, the funds from the ODI filing must be earmarked for the purpose for which they were filed and cannot be used for other projects to ensure compliance with the flow of funds.

2. Does the path country need to be filed?

If the pathway country is only used as a conduit for funds and is not involved in actual business, no filing is generally required. However, if a company is established and conducts business in the pathway country, it is required to comply with local regulations and file.

3. What are the currency requirements for ODI remittances?

Enterprises are required to follow the "same currency principle" when remitting ODI, i.e., the currency of remittance should be the same as the currency of the record. If multiple currencies are listed in the record, the currency of the actual contribution shall prevail.

4. What is the relationship between the time of establishment of an offshore company and ODI filing?

Theoretically, the ODI filing should be completed before setting up the offshore company. However, due to the long filing cycle, enterprises can prepare for offshore company establishment while submitting the filing, and some regions accept the case where the company is established but not operated within 1 month before the filing.

5. Is it possible for an already operating offshore company to make a supplementary ODI filing?

Overseas companies that are already in operation are generally unable to make a retroactive ODI filing. However, if the company has not actually carried out business and its shareholders are mainland companies or non-natural persons, it can apply for a retroactive compliance filing according to the policy.

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