China Business Research & Publications

S.J.Grand offers quality research, case studies and essential updates on the latest China tax and business issues through our news feed, periodic newsletters and our online resource library.

Please feel free to browse, to search using the tags below or contact an S.J. Grand office if you would like to know more about a particular topic that interests you.

Important Reform of Foreign Exchange Administration System for Trade in Goods

On Dec 01, 2011 China rolled out a pilot reform of its foreign exchange control system for international trade in goods in pilot regions including Jiangsu, Shandong, Hubei, Zhejiang (excluding Ningbo), Fujian (excluding Xiamen), Dalian, and Qingdao. 

Making Your Voice Heard: Marketing Strategies for Small Business

In this month’s China Brief from the American Chamber of Commerce in China, SJ Grand Communications Manager Paul Flynn outlines five key marketing strategies for foreign SMEs in China.

In the absence of large budgets and internal expertise, SMEs must approach their marketing strategies with a considered mix of resource allocation and technical outsourcing.

Full article available to download below.

The Investor Guide: Are Chinese Companies Still Worth Investing In?

In Bloomberg BNA's Securities Regulation & Law Report, SJ Grand's General Manager, South China, Philippe Brague has written on the issues facing foreign investors investing in Chinese public companies

Faced with armies of researchers looking for accounting irregularities, are Chinese public companies still a good bet and how can investors protect themselves from facing the firing squad?
 
Full article available to download below.

RMB Reinvestments through Chinese Holding Companies

On December 8, 2011, the Ministry of Commerce (MOFCOM) and State Administration of Foreign Exchange (SAFE) issued the circular Shangzihan [2011] No. 1078 (Circular 1078), which sought to clarify issues relating to the use of RMB income by Chinese Holding Companies (CHCs) to reinvest in existing subsidiaries or establish new companies in China.

We examine Chinese Holding Companies as a vehicle for foreign investment and outline how the new regulations will affect their operation.

Equity M&A in China

Many foreign companies are looking to acquire PRC companies to access the Chinese market or expand their Chinese operations. M&A activities in China are divided into two main categories: I) Equity M&A and; II) Asset M&A.

I. Equity M&A

This refers to a transaction where foreign investors purchase by agreement the shares of a Chinese domestic company or subscribe for an increased proportion of the shares in a domestic company.

Hong Kong Company Incorporation

Hong Kong, an internationally respected business hub, is known for being an efficient corporate vehicle for setting up business in Asia. Incorporation of a company in Hong Kong allows foreign investors to gain access to the huge market of Mainland China, and is often viewed as “Gateway to China”.

Shanghai VAT Pilot Program: Zero rate and exemption clarified

China’s Ministry of Finance (MoF) and State Administration of Taxation (SAT) have released an update to the VAT reforms under the Shanghai pilot program. The announcement clarifies issues regarding the application of “zero VAT rate” and “VAT exemption”.

According to the guidance—Cai Shui [2011] No. 131 issued on Dec 20, 2011,the following VAT applicable services provided in pilot areas are subject to the zero VAT rate:

SHANGHAI VAT PILOT PROGRAM

  • From 1 January 2012 qualified businesses in Shanghai will be required to charge VAT following approval by the local tax bureau;
  • Input VAT is creditable both for qualified pilot participants and their customers;
  • Generally, the program follows existing VAT mechanisms;
  • Two new VAT rates will be introduced, 6% and 11%, adding to the existing rates of 13% and 17%;
  • Treatment of exports is yet to be determined but likely 0% or tax exempt;
  • The first VAT return is due on 15 February 2012;

Introduction to Social Insurance for Foreign Workers

BUSINESS BRIEF -- NOVEMBER 2011

  • Social Insurance Laws for foreign workers were promulgated on July 1, 2011;
  • Regulations on payment came into force on October 15, 2011;
  • Companies are now required to register and commence payment on behalf of eligible foreign employees;
  • No measures have been released to deal with the issue of back payment to July 1, 2011, but companies are advised to set aside adequate funds.

Due Diligence in China: Ensuring Intelligent Investing

When considering an investment in a venture operating in China, whether it be a partnership, acquisition, shareholding stake, securities purchase or other form of transaction, it is important to conduct due diligence to minimize risk, assess competitive advantages and identify growth opportunities.

Circular 58 and incentives for development in Western China

On July 27th, 2011, the Ministry of Finance, the State Administration of Taxation (SAT)  and the General Administration of Customs (GAC) issued circular Caishui [2011] No. 58 (“Circular 58”), which updates multiple development incentives for China’s Western Regions. The circular has a ten year timeframe, effective retrospectively from January 1, 2011, until December 31, 2020.

China’s new individual income tax rates.

TAX BRIEF -- JULY 2011

China’s legislature has approved an increase in the individual income tax free threshold to RMB 3500 for Chinese nationals and a new streamlined schedule of tax brackets, down from nine to seven. The new rates will come into effect from September 1st.

Foreigners will also be subject to the new rates; however, the tax free threshold for foreign workers will remain at RMB 4800.

Shanghai foreign exchange controls on remittance of cost reimbursement items

In December 2010, the Shanghai Foreign Exchange Authority (SFEA), a branch of the State Administration of Foreign Exchange (SAFE), released a circular that relaxed FOREX control requirements on cross-border payments of reimbursements and other allocated expenses.

Shanghai eases forex controls on remittance of cost reimbursements

BUSINESS BRIEF -- MAY 2011

In December of 2010, the Shanghai Foreign Exchange Authority (SFEA), a branch of the State Administration of Foreign Exchange (SAFE), announced a change in FOREX control requirements on cross-border payments of reimbursements and other allocated expenses, through the issuance of Shanghai Hui Fa [2010] 192 (“Circular 192”).

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