The most common way to repatriate profits from China, as in the case of subsidiaries to their parent company in Europe, is to pay dividends. However, dividends (as well as interests and royalties) are subject to a tax paid on a withholding basis – in principle 20%, but temporarily reduced to 10%. In addition, dividends can only be repatriated on the accumulated profits of the subsidiary, and only for profit that has been audited in that year.

The withholding tax may be further reduced under tax treaties signed by China and the country of residence of the company receiving the dividends.