On July 1, 2026, the “State Council Regulations on Foreign Investment” (Decree No. 837) will officially take effect. If you are a cross-border e-commerce seller or the owner of a company expanding overseas […]

Attention Cross-Border Sellers: Following Order No. 837, Can Hong Kong Companies Still Be Used for Receiving Payments, Overseas Warehouses, and Red Chip Structures as Before?

Decree No. 837 contains a significant change that many people have overlooked—for the first time, it includes ”individual residents” within the scope of foreign investment regulation.

After the issuance of Order No. 837, a rumor began circulating among cross-border sellers: ”If your company has filed an ODI, the tax authorities will focus their attention on your overseas profits, making it more likely that you’ll be audited.”

As a result, many sellers have come to the conclusion that rather than ”asking for trouble” by engaging in ODI, it’s better to maintain the status quo and ”keep a low profile.”

That logic is wrong. And it’s dangerously wrong.

It’s not that ”doing ODI will get you audited,” but rather that doing ODI ensures you’ll have records to show and a case to make when you are audited. The truly dangerous ones are, in fact, those sellers who ”did nothing”—when the day comes that you’re audited, you won’t even have the right to explain yourself.

This article sets your logic straight.

In June 2026, Shenzhen issued the local standard titled “Guidelines for Financial and Tax Compliance Management of Small and Medium-Sized Enterprises.” At the same time, the fully digital “Golden Tax Phase IV” regulatory system was fully implemented in Shenzhen.

Two tracks are being pursued simultaneously.

One is ”standards”—which tell you what to do; the other is ”systems”—which monitor whether you’re following them.

Data shows that the number of small and medium-sized enterprises in Shenzhen currently using outsourced accounting services has exceeded 500,000. However, a survey by the association also reveals that 80% startups and micro and small enterprises have fallen into pitfalls such as irregular financial and tax reporting, incorrect selection of accounting service providers, abnormal filings, underreporting, and flawed planning.

For cross-border e-commerce sellers, the situation is even more complex—they must maintain domestic accounting records, report overseas revenue, manage VAT, and handle exchange rate differences, which adds several additional compliance requirements compared to companies engaged solely in domestic trade.