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How can I repatriate profits from China to the parent company abroad?

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

The 10% Withholding Tax may be reduced under tax treaties signed by China and the country of residence of the company receiving the dividends.