China Business Research & Publications

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Alleviating fraud risks in China

Based on the findings of Deloitte Enterprise Risk services and Fangda Partners, China’s fraud cases have increased to the level of 6 times higher (about 166 000 cases in total) than the cases in Europe. Also, the count of the money spent on fraud cases is high as well. Another side effect of fraud and bribery is the attention of the media that damages the reputation and integrity of the company. Therefore, measures must be taken in order to temper down the fraud risks.

How to win China’s “good enough” battlefield?

Looking 10 years back, China was the ideal place to market high premium products. But due to the changes during those golden years, massive productions of high quality, cheap goods also known as “me too” products have emerged causing a huge competition within the Chinese domestic market.

INVESTING IN CHINA

Release and revision of the Catalogue of Priority Industries for Foreign Investment in Central & Western Regions “

NGOs in China: Growth Prospects amid Social and Regulatory Challenges

Obstacles associated with Establishing Non-Governmental Organizations

The majority of obstacles organizations seeking Non-Governmental Organization (NGO) registration face are associated with restrictive government policies.  These restrictive government policies may stem from the distrust China has developed for NGOs due to the scandals that have been associated with many NGOs within China.

The Establishment of Trade Unions in China

The All-China Federation of Trade Unions (ACFTU) is in charge of promoting the establishment of company trade unions in SMEs. PRC law does not require a company to establish a company trade union among its employees, but it is noted that a company with 25 members or more “shall” establish a company trade union. Currently there are no legal penalties for companies that choose not to establish trade unions, but not establishing may lead to bad publicity and monetary loss.

The Management and Turnaround of Distressed Companies in China

Background

Since the early 1980’s, trillions of dollars have been invested in China. These investments have gone towards the funding of joint ventures, wholly owned foreign enterprises, and new business ventures. With the entrance of these new firms it is only reasonable that some have fared better than others. A differentiating factor that determines what firms do well in China is; the ability of firms entering China to deal with the new challenges they will experience.

The Rise and Fall of Venture Capital in China

In the years following 1978 the Chinese government sought to move away from state control of all productive assets and enabled China to proceed with major economic reform. For this economic reform to occur, China encouraged the formation of rural enterprises and private business, while also liberalizing foreign trade and investment. One of the most vital portions of China’s economic reform is that it enabled foreign investment to occur within China.  Foreign and private investment has helped to make China one of the fastest growing economies.

FAVOURABLE TAX TREATMENT OF UNCREDITED INPUT VAT IN ASSET RESTRUCTURING TRANSACTIONS

 “The State Administration of Taxation (“SAT”) issued bulletin 55 in December 2012 to clarify the favorable value-added tax (“VAT”) treatment of uncredited input VAT in asset restructuring transactions if certain conditions are satisfied”

CUSTOMS PAPERLESS CLEARANCE

China’s General Administrative of Customs (“GAC”) has introduced a regional pilot program for paperless customs clearance starting August 01, 2012. Paperless custom clearance is a process under which customs declaration information will be stored and conveyed through computers and other electronic media and review by Customs will be automated.

Value Added Tax Pilot Program

A significant milestone in the reform of China’s indirect tax system has recently been achieved by introducing the Value-Added Tax (VAT) pilot programin Shanghai.  The VAT program is expected to ease the burden of double taxation onservice companies in Shanghai and offer subsidies to companies that may pay higher taxes due to the reform.

China launches reform to allow Foreign Hedge Funds in Mainland China

China has for years encouraged long-term investors such as foreign insurers and pension funds to invest directly in the country's stocks and bonds, as part of its broader reforms of the country's financial sector. But foreign Hedge Funds, criticized for being be too volatile were banned by authorities and had no direct access to the Chinese market. 

Understanding China's Five-Year Tax Rule

The five-year tax rule is an important and misunderstood factor in determining a tax strategy for expatriates living in China. Foreign nationals who reside in China for more than five years can be considered Chinese tax residents and therefore liable with tax authorities on their global income. In this article, we outline the main points of this rule and consider strategies for compliance.

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