Profit distribution of foreign-invested enterprises refers to three types of foreign-invested enterprises: Sino-foreign joint ventures, Sino-foreign cooperative enterprises and foreign-funded enterprises. The profits of foreign-invested enterprises, formerly known as foreign-funded enterprises, must be paid income tax first, and then distributed in the following order: payment of various compensation, liquidated damages, late fees, penalty interest and fines. Make up for the losses of previous years.
The withdrawal ratio of reserve fund, enterprise development fund and employee rewards and benefits shall be decided by the board of directors, in which the reserve fund is mainly used to make up the losses of enterprises, and the withdrawal ratio shall not be less than 10% of after-tax profits. When the proportion of extraction reaches 50% of the registered capital, it may not be extracted.
Extended data
The local currency invested by the central bank to purchase foreign exchange assets. As the RMB is a non-convertible currency, foreign capital needs to be converted into RMB before it can be used in circulation. The country needs to invest a lot of money in exchange for foreign capital, and needs the country to buy foreign exchange in its own currency, thus increasing the "money supply" and forming foreign exchange accounts.
The enterprise development fund is mainly used to expand production and operation. With the approval of the original examination and approval authority, it can also be used as an investor to increase capital. Enterprises with foreign investment may not withdraw enterprise development funds. Employee incentive and welfare funds are used for employee non-recurrent incentives, employee housing purchase and construction subsidies and other collective benefits. The rest is distributable profits, of which the joint venture is distributed according to the actual investment ratio of the investor;
A contractual joint venture shall make distribution according to the contract; Enterprises with foreign investment shall make distribution in accordance with the articles of association. The undistributed profits of enterprises in previous years can be merged into the distribution of this year. Enterprises are generally not allowed to pre-distribute profits, but if the benefits are good and there is no business due, there are still more profits after paying income tax in advance according to regulations, and with the approval of the competent financial authority, a part of profits can also be pre-distributed.
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