赛维模式还能不能用？税局还认可吗？ -

Recently, there’s been a topic that’s been discussed repeatedly in the cross-border e-commerce community:

“Can the Suntech Model Still Be Used?”

Many sellers are starting to feel anxious because they’ve noticed that, following the submission of tax-related information to the platform, data regarding their store’s ownership has become increasingly transparent.

In the past, retail companies may have filed zero tax returns for extended periods, while their revenue was channeled to Hong Kong companies or other overseas entities.

Now here's the problem:

The platform data has been sent to the store;

The tax authorities look at the business entity;

However, the seller explained that the profits were actually accounted for at the level of the Hong Kong company or the operating entity.

As a result, many people have begun to draw the conclusion that:

“Is the Suntech model on its way out?”

That conclusion is too simplistic—and too dangerous.

The real question isn't “whether the Suntech model is still viable.”

Instead:

Is this so-called "Saiwei Model" actually a fully functional compliance system, or is it just a hollow framework?

If you’ve merely registered a Hong Kong company, signed a few contracts, and switched a few payment accounts, but the flow of goods, cash, contracts, invoices, and tax filings don’t match up, then that’s not the SAIWEI model.

It's just an empty shell disguised as Savi.

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I. Let’s get one thing straight: What exactly is the “Saiwei Model” everyone keeps talking about?

The “Saiwei Model” referred to in cross-border circles is not, in essence, an official tax concept.

It is more of a colloquial term used within the industry to refer to a certain type of group-based structure in cross-border e-commerce.

Simply put, it means:

A store company is primarily used to open a store on a platform;

Actual sales revenue and costs are accounted for centrally by the overseas sales entity;

Domestic operating entities are responsible for functions such as supply chain management, operations, services, exports, and administration;

Overseas profits are then reasonably repatriated to domestic entities through means such as the procurement of goods, trade in services, and related-party transactions;

This ultimately results in a closed-loop system covering the division of responsibilities between domestic and overseas entities, the allocation of revenue and costs, profit distribution, and tax filing.

Saiwei Times disclosed a similar arrangement in its response to the IPO inquiry: Store companies are used solely for opening stores; they do not engage in actual business operations, do not employ staff, and, in principle, do not maintain accounting records or open bank accounts; Hong Kong Lanmate and U.S. Lanmate serve as the accounting entities for store revenue and costs, with store-related revenue, costs, and operating expenses recorded in the financial statements of the respective entities; the main subsidiaries, in turn, are substantively responsible for day-to-day operations, maintenance, as well as customs clearance, foreign exchange transactions, and tax payments.

Please note that there are a few key terms here:

Accounting entity; actual business entity; customs declaration and clearance; foreign exchange receipts and payments; tax payment; internal controls.

So, the Suntech model isn’t simply a matter of:

“I have a company in Hong Kong, so my income isn’t through the store’s company.”

And certainly not:

“I can file a zero-report on my store's end; all the profits go to Hong Kong.”

For the Savi model to truly be viable, it must be supported by a comprehensive business workflow, financial accounting, tax filing, legal documentation, and internal control systems.

II. The fact that stores are required to file reports does not mean the SAIWEI model is no longer effective

A common misconception among many sellers is to equate “filing” with “paying taxes.”

They believe that:

As long as the store reports its revenue, it means that all of that revenue must be taxed through the store;

If the income has already been reported at the Hong Kong company or operating entity level, having the store report it as well would constitute double taxation;

So, the Suntech model has failed.

This logic isn't sound.

Reporting is the process of submitting operational facts.

Tax payment involves calculating the tax liability based on the tax return, in accordance with tax laws and actual profits.

Filing a tax return does not necessarily mean paying taxes twice.

However, it’s also important to note that:

Filing a tax return does not mean “simply reporting data without bearing any tax consequences.”

The key is whether your revenue, costs, expenses, related-party transactions, and profit allocation can form a coherent explanation.

Now that the reporting of tax-related information by online platforms has been implemented, internet platform companies are required to report tax-related information—such as the identity and income details of merchants and workers on their platforms—to the tax authorities in accordance with regulations. A supporting announcement also specifies that platform companies must report revenue information from the sale of goods and services on a quarterly basis, including total revenue, refund amounts, net revenue, and the number of orders.

This means that the store's core data has already been viewed.

If the platform’s reporting shows that a particular business entity has generated a large amount of sales revenue, but that entity has consistently filed zero returns, reported no income, and provided no accounting explanation, the tax authorities will naturally require you to provide an explanation.

This does not mean that the “Saiwei model has been rejected.”

Here's what the regulator is asking you:

Why is the platform data recorded under this entity? Why isn’t revenue recognized under this entity? Where are the costs recorded? Where is the profit recorded? And who ultimately pays the taxes?

If you can answer the question and your line of reasoning is complete, there is still room for interpretation.

If you can’t answer that question and simply say, “I’m using the SAIWEI model,” the tax authorities certainly won’t accept that.

III. What the tax authorities truly do not recognize is “Pseudo-Saiwei”

What many sellers refer to as the “Saiwei model” is actually only half-baked—or even just a superficial imitation.

The Hong Kong company has been registered;

We now have an operating company within the country as well;

The contract template has been signed;

The payment collection tool is now up and running;

However, the business has not actually been integrated into this architecture at all.

There are four most common questions.

1. The logistics process hasn't been fully implemented

Your actual sales volume is substantial, but formal customs clearance for exports accounts for only a small portion of it.

The remaining inventory is either being exported via invoice-based transactions, lacks complete export customs documentation, or has discrepancies between the logistics records and the platform’s sales data.

In this situation, it is difficult to prove that:

Who exactly is selling these goods?

Where are the exports coming from?

Who holds title to the goods?

Who recognizes revenue?

Who bears the cost?

If you don’t even have a clear understanding of the goods flow, discussions later on about revenue consolidation, profit repatriation, and tax compliance will all seem very vague.

2. The cash flow hasn't been finalized

Some sellers claim that their revenue is held in a Hong Kong company, but in reality, once the platform’s payments are deposited into their payment collection tools, they are withdrawn to the owner’s personal card, suppliers’ personal cards, or other affiliated accounts.

The funds were not transferred in accordance with the contract, nor were they recorded in the company’s books.

In this situation, the tax authorities do not view this as a “compliant structure,” but rather as a “blurring of the lines between public and private interests.”

As long as the funds leave the company’s accounts, it’s difficult to prove that you’re conducting normal cross-border intra-group settlements.

3. Profit repatriation has not been successfully implemented

A genuine structure must explain how overseas profits can be reasonably repatriated to the domestic market.

Is it through the procurement markup?

Is it through an operational service fee?

Is it through a management service fee?

Is it through supply chain services?

Is it through a brand license?

For each method, there must be a contract, a basis for pricing, an invoice, bank statements, evidence of service delivery, and accounting records.

If a Hong Kong company retains a large amount of profit on its books while its mainland operations team does not receive reasonable service revenue, or if the mainland company consistently reports losses or low profits even though the majority of its business activities actually take place on the mainland, this can easily raise questions about the appropriateness of profit allocation.

4. The tax filing process didn't go through

Many sellers say:

“The profits have already been taxed in China.”

However, upon reviewing the financial records, it became clear that the revenue and profits reported by the domestic operating entity were nowhere near enough to cover the entire business.

There is a complete discrepancy between the platform’s sales figures, payments received by the Hong Kong company, customs declaration data, revenue from the mainland company, and service fee invoices.

Under these circumstances, the claim that “taxes have already been paid domestically” is difficult to substantiate.

The tax authorities won't just accept the conclusion at face value.

It can read numbers.

IV. Why Is It Difficult to Succeed by “Simply Copying Saisi”?

A major misconception among many sellers is that they view the Saiwei model as a template that can be replicated.

However, a listed company’s ability to present a coherent organizational structure does not depend on the “name of the structure,” but rather on a comprehensive support system.

It operates under a group management structure;

There is a division of labor among domestic and overseas subsidiaries;

Has a financial accounting system;

Internal controls for third-party payment accounts;

An audit report is available;

Verified by a lawyer;

Has a tax compliance certificate;

Includes explanatory materials regarding customs, foreign exchange, and tax matters;

There is a matching logic between customs declarations, collections, costs, and expenses.

For most small and medium-sized sellers, the so-called "Saiwei model" typically involves:

Hire an agent to register a Hong Kong company;

The business entity files a zero-report;

The goods are still being exported on a FOB basis;

The money should still be deposited into a personal account;

There's still no account;

Trade in services is solely for the purpose of foreign exchange settlement;

The contract is just for show;

It's unclear exactly where profits are taxed.

This model is not the Suntech model.

This is “Fake Saisui.”

The biggest problem with “Pseudo-Saiwei” is that it has neither genuine reporting from its retail outlets nor actual business operations by its Hong Kong company, let alone full tax compliance by its mainland operating entity.

All three tried to get the better of the situation, but in the end, none of them could explain themselves.

V. Following the issuance of Order No. 837, foreign entities can no longer piggyback at will

In the past, when many sellers set up their Hong Kong business structures, they considered only one issue:

“Can I open a store? Can I accept payments? Can I pay less in taxes?”

But now, there’s one more issue to consider:

Does the establishment and control of an overseas entity involve compliance with foreign investment regulations?

The “Regulations of the State Council on Foreign Investment” (Decree No. 837 of the State Council) clearly define foreign investment as activities through which an investor, by contributing assets or equity interests, providing financing, or offering guarantees, directly or indirectly acquires ownership, control, operational management rights, or other related interests in overseas enterprises or assets; Investors include enterprises, other organizations, and individual residents within China. The regulations will take effect on July 1, 2026.

This means that whether a mainland company establishes a Hong Kong company or a resident individual controls a Hong Kong company, the decision can no longer be based solely on the convenience of receiving payments.

In particular, if a corporate group intends to use its Hong Kong company as the primary entity for sales, collections, and profit consolidation, it must assess:

Whether it involves ODI filing or other compliance obligations related to overseas investment;

Who holds the shares in a Hong Kong company;

What is the relationship between mainland enterprises and Hong Kong companies?;

Are there compliant channels for transferring funds overseas and repatriating profits?;

Should individual residents who control overseas entities pay attention to subsequent detailed rules?

We cannot simply say that “all sellers must immediately submit ODI,” nor can we say that “registering a Hong Kong company as an individual is definitely problem-free.”

The correct way to do this is:

First, identify exactly what functions your overseas entity performs, and then determine which compliance path is required.

VI. A model that can truly succeed must meet four conditions

First, the relationship between the parties must be clear.

Who is the store owner?

Who is the seller?

Who is the procuring entity?

Who are the main exporters?

Who is the operating entity?

Who is the payee?

Who bears the inventory risk?

Who is responsible for ad placement?

Who is responsible for customer service and after-sales support?

Who reaps the profits?

These issues must be able to be illustrated in a clear diagram showing the main relationships.

If the boss can’t even explain it clearly himself, there’s no way the tax authorities will accept it.

Second, the export of goods must comply with regulations.

In cross-border e-commerce, the flow of goods serves as the foundational evidence.

Whether it’s 0110, 9610, 9710, or 9810, or whether the export is conducted through an agent or on a self-operated basis, you must be able to explain how the goods are exported.

If a company consistently pays for exports out of pocket, makes purchases without invoices, and lacks customs declaration documents, yet still wishes to demonstrate that the overseas company’s sales revenue is reasonably aligned with the domestic operating entity’s service revenue, it will be extremely difficult to do so.

The SAIWEI model is not about “avoiding customs declaration.”

On the contrary, customs declaration documents serve as crucial evidence of the authenticity of the transaction.

Without a flow of goods, you can’t sustain cash flow and tax compliance.

Third, related-party transactions must be based on a sound pricing rationale.

There are often related-party transactions between Hong Kong companies and companies operating on the mainland.

For example:

Procurement Transactions;

Supply Chain Services;

Operations Services;

Brand Services;

Technical Services;

Management Services;

Advertising placement services.

These transactions cannot be priced arbitrarily.

In accordance with the Corporate Income Tax Law and the Rules on Special Tax Adjustments, tax authorities have the right to make adjustments if related-party transactions do not comply with the arm’s-length principle or result in a reduction of taxable income or taxable profits; when a company makes payments to overseas related parties, it must also be able to provide contracts, agreements, and other documentation proving that the transactions actually took place and comply with the arm’s-length principle.

Therefore, sellers cannot simply draw up a service contract and then transfer the money without proper procedures.

You need to prove that:

The service was actually provided;

Reasonably priced;

Costs are commensurate with benefits;

Domestic companies earn reasonable profits;

There are business reasons for retaining profits in Hong Kong companies;

The overall tax burden is not artificially shifted.

That’s what compliance with related-party transaction regulations is all about.

Fourth, the tax filing process must be a closed-loop system.

The real key isn't “which entity reports,” but rather “whether there are any omissions in the overall report.”

The platform generates revenue;

The Hong Kong company has received payment;

The company has operations within the country;

Goods are exported;

Services have been provided;

Profits are distributed;

Taxes must be reported.

These chains must correspond to one another.

If the store’s system shows sales, but the store’s company files a zero tax return;

A Hong Kong company has revenue but does not undergo audits or file tax returns;

The domestic company is responsible for operations but does not generate reasonable service revenue;

The boss's personal account has again received a large influx of funds;

That's not what we call architectural optimization.

That's called risk accumulation.

VII. The most important thing sellers should be doing right now is not asking, “Can SAIWEI still be used?” but conducting a self-inspection.

If you've already set up a similar architecture, we recommend that you conduct a self-assessment first.

1. Will the store data match up?

Can the platform's GMV, refunds, net revenue, order volume, and payment gateway transaction volume be correlated?

Who is the owner of the store?

Which entity will receive the data submitted by the platform?

Has this entity filed a report in the past?

If no declaration was filed, can you explain the business reasons for pooling the revenue with another entity?

2. Will the customs declaration data match up?

Do actual sales volumes match customs declaration volumes?

Are there any export orders?

Are there any small packages without a shipping label?

Do you have any customs clearance documents from a freight forwarder?

Are the customs declarant, the consignee, the payee, and the platform operator the same entity, or is there a reasonable relationship among them?

3. Do the cash flows balance?

Which account do platform payments go into?

Have you ever used a personal card?

Does the Hong Kong company have bank statements or payment transaction records?

How do domestic companies collect service fees or payment for goods?

Is each transaction supported by a contract, invoice, or accounting document?

4. Can you clearly explain how profits are allocated?

Why Are Profits Kept in Hong Kong?

What functions and risks do Hong Kong companies assume?

What work has the domestic team done?

Have domestic companies received a reasonable return?

Are there cases where work is done domestically but profits are taken overseas?

5. Can the tax filing process be fully closed-loop?

Has the store's company been registered?

Do Hong Kong companies undergo audits and file tax returns?

Has the domestic operating entity recognized service revenue or trade revenue?

Are there instances where the same income goes unreported, or where multiple parties file duplicate or inconsistent reports?

If you can’t answer these questions, don’t be quick to call yourself a “Saiwei model.”

First, let's get the books in order and make sure the workflow is running smoothly.

VIII. Conclusion: The Suntech Model Hasn’t Failed; What Has Failed Is the “Pseudo-Suntech” Model”

To sum it up in one sentence:

The Saiwei model itself isn't the problem; the problem is that most sellers haven't truly implemented the Saiwei model.

The true Savi Model is a group-wide financial and tax compliance system.

It is not about registering a Hong Kong company;

It is not that the store or company has been filing zero tax returns for an extended period;

It’s not about leaving profits overseas and ignoring them;

It is not a matter of freely exchanging foreign currency for trade in services;

It's not about continuing to export on a payment-on-delivery basis;

And it certainly isn't about making up a story after the money has been deposited into a personal account.

It must stand up to four questions:

How do we ship the goods?

How will I get my money back?

Who Gets the Profits?

Where do I pay my taxes?

Only if you can provide complete answers to all four of these questions—and each answer is supported by contracts, customs declarations, transaction records, financial statements, audit reports, and tax filing documents—will your structure be plausible.

If you can't answer that, the tax authorities won't recognize it as the “Saiwei Model.”

Instead, you’re this “fake SEVI”—all name and no substance.

What cross-border sellers really need to do next is not to keep asking:

“Is the Suntech model still viable?”

Instead, ask yourself:

Can I really explain my business operations clearly to the tax authorities?

Only when you can explain it clearly is it truly an architecture.

If you can't explain it clearly, that's a risk.

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