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.

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