China Issues Personal Information Protection Compliance Audit Measures
On 14 February 2025, the Cyberspace Administration of China (“CAC“) officially released the Personal Information Protection Compliance Audit Measures (个人信息保护合规审计管理办法, “Audit Measures“), which will come into effect on 1 May 2025. The release of the Audit Measures marks the official implementation phase of the personal information protection compliance audit system established by Article 54 of the Personal Information Protection Law of the PRC (个人信息保护法，”PIPL“), which requires personal information processors (“PIPs“) to regularly conduct audits on their compliance with the laws and regulations of the People’s Republic of China (“PRC“) in relation to the processing of personal information (“Compliance Audits“).
In terms of the frequency for conducting Compliance Audits, Article 4 of the Audit Measures states that PIPs handling the personal information of more than 10 million individuals are required to conduct a Compliance Audit at least once every two years. For general PIPs that do not fall within the scope of Article 4, the PIPL and the Audit Measures do not specify the exact frequency for conducting regular Compliance Audits. According to the responses from the official from CAC to questions about the Audit Measures, these PIPs should reasonably determine the frequency of conducting Compliance Audits based on their own circumstances.
Separately, overseas PIPs are also required to conduct regular Compliance Audits in accordance with Article 54 of the PIPL. It is noteworthy that the scope of application of the Audit Measures is Compliance Audits within the territory of the PRC, pursuant to Article 2 of the Audit Measures. However, it is unclear whether this requirement applies to Compliance Audits of overseas PIPs. This requires further interpretation and clarification.
Implementation Measures for the Administration of Company Registration Come Into Force on 10 February 2025
On 20 December 2024, the State Administration for Market Regulation (“SAMR“) of the People’s Republic of China (“PRC“) promulgated the Implementation Measures for the Administration of Company Registration (公司登记管理实施办法, “Implementation Measures“) to implement the new PRC Company Law.
The Implementation Measures came into effect on 10 February 2025. Below is a summary of its key highlights.
Introducing Data and Network Virtual Property as Capital Contributions
The Implementation Measures introduce, for the first time, data and network virtual property as permissible forms of capital contribution, expanding the scope of non-monetary contributions under the PRC Company Law.
The Implementation Measures allow shareholders to use such properties as capital contributions if permitted by applicable ownership laws, indicating that such properties should be evaluable, transferrable, and their ownership verifiable. Following the principles of the PRC Company Law, non-monetary capital contributions shall be appraised and verified according to the law and may not be overvalued or undervalued.
Specifying Filing Requirements for Registration Liaison Officer
While the new PRC Company Law does not require the filing of a registration liaison officer, the PRC Regulations for the Administration of Market Entities Registration (中华人民共和国市场主体登记管理条例) and its Detailed Rules (中华人民共和国市场主体登记管理条例实施细则) introduced this requirement but did not specify the details of the requirements for filing of a registration liaison officer.
The Implementation Measures further stipulate the following:
- Information to be filed: Includes the liaison officer’s phone number, email address, and other standard contact information;
- Role of liaison officer: Acts as the primary contact between the company and registration authorities;
- Who can be a liaison officer: The company’s legal representative, director, supervisor, senior manager, shareholder, or employee; and
- Change in the registered liaison officer: Companies must update the registration authorities within 30 days of such change.
Overall, the Implementation Measures mark a significant advancement in implementing the company registration framework under the new PRC Company Law.
For more information, click here to read the full legal update on the Implementation Measures.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
