TMF Group - Building bridges to china: part 2

1,502 views

Published on

Published in: Investor Relations
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,502
On SlideShare
0
From Embeds
0
Number of Embeds
262
Actions
Shares
0
Downloads
23
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

TMF Group - Building bridges to china: part 2

  1. 1. Building Bridges to China PART 2 Jochum S. Haakma Global Director of Business Development, TMF Group1 28 September 2012 - Chester Beatty Library
  2. 2. Building Bridges to China Jack Yu Managing Director UK & Western Europe Yingke Law Firm2 28 September 2012 - Chester Beatty Library
  3. 3. Building Bridges to China Corporate Establishment and the Chinese Legal Environment3 28 September 2012 - Chester Beatty Library
  4. 4. Shenzhen, Southern China Building Bridges to 1978 China4 28 September 2012 - Chester Beatty Library
  5. 5. Building Shenzhen, Southern China Bridges to China 20125 28 September 2012 - Chester Beatty Library
  6. 6. Building Bridges to Shanghai Pudong, 1989 China6 28 September 2012 - Chester Beatty Library
  7. 7. Building Bridges to Shanghai Pudong, 2011 China7 28 September 2012 - Chester Beatty Library
  8. 8. Building Bridges to GDP Explosion China GDP Per Capita (USD, 1978-2010)8 28 September 2012 - Chester Beatty Library
  9. 9. Building Bridges to GDP Explosion China China is big, but will get bigger … almost a quarter of world output by 2030. Nominal GDP 2010, USD 62trn Nominal GDP 2030, USD 309trn (USD trn, % of global) (USD trn, % of global) ROW China 10% India Asia ex CIJ Japan ROW Japan 6% 3% 5% 6% 3% China 10% EU-27 23% SSA 14% 2% MENA 3% Latam US India EU-27 6% 12% 10% 27% CIS 3% CIS 5% Asia ex CIJ Latam 8% US MENA SSA 9% 5% 24% 6%9 28 September 2012 - Chester Beatty Library
  10. 10. Building Bridges to The Whole Country is Growing China NE Liaoning Heilongjiang 1,200 25% Jilin NW Shaanxi Gansu North 1,000 Ningxia Qinghai Beijing Hailar 20% Tianjin HEILONGJIANG Inner Mongolia Hebei Qiqihar Xinjiang Shandong Harbin Karamay Changchun Kulja JILIN 800 Urumqi Shenyang INNER MONGOLIA 15% HEBEI LIAONING Kashgar XINJIANG Hohhot Beijin Yumen g Dalian Tianjin Yinchuan TaiyuanShijiazhuang Yantai 600 Golmud Qingdao East NINGXIA SHANXI Xining SHANDONG Shanghai QINGHAI Lanzhou Xian Zhengzhou JIANGSU Jiangsu 10% Shiqunhe GANSU Zhejiang SHAANXI HENAN Hefei Nanjing XIZANG Shanghai 400 SICHUAN Wuhan ANHUI HUBEI Hangzhou Lhasa Chengdu CHONGQING ZHEJIANG Changsha Nanchang Guiya HUNAN JIANGXI Fuzhou 5% SW ng GUIZHOU FUJIAN Xiamen 200 Sichuan Kunming Guangzhou Chongqing GUANGXI YUNNAN GUANGDONG Guizhou Shenzhen South Nanning Yunnan Guangdong Guangxi Fujian Tibet Haikou Hainan 0 0% HAINAN China China China China China China China Centre Shanxi East North Centre South SW NE NW Henan Anhui GDP, 2009, USD bn Hubei Hunan Average nominal GDP growth, 2005-09(RHS) Jiangxi10 28 September 2012 - Chester Beatty Library
  11. 11. Building Bridges to Market Access China Investment Catalogue: Four Categories  Encouraged  Restricted  Forbidden  Permitted Regional policies: Central & Western Regions  Tendency: From Coast Towards the West  Preferential Policies11 28 September 2012 - Chester Beatty Library
  12. 12. Building Law and Compliance - Regulatory Approvals Bridges to China  Ministry of Commerce (MOCOM)  State Administration of Industry and Commerce (SAIC)  State Administration of Foreign Exchange (SAFE)  National Development and Reform Commission (NDRC)  State Administration of Taxation (SAT)  The Ministry of Land and Resources (MLR)  China Securities Regulatory Commission (CSRC)  State-owned Assets Supervision and Administration Commission (SASAC)  Ministry of Environmental Protection  Other departmental authorities (eg. MIIT governing telecom industries)12 28 September 2012 - Chester Beatty Library
  13. 13. Building Bridges to 1. Forms of Establishment China  Wholly Foreign Owned Enterprise (WFOE)  Joint Venture  Representative Office13 28 September 2012 - Chester Beatty Library
  14. 14. Building Bridges to General Procedures for WFOE Establishment China 1. Company name pre-approval 2. Approval of the Ministry of Commerce or its local branches 3. Registration with local Administration for Industry and Commerce and issuance of business license 4. Post- establishment registration  Registration with the local Technology Supervision Bureau for an Organisation Code  Registration with local Public Security Bureau and chop carving  Tax Registration  Registration with the local bureau of foreign exchange  Registration with local Bureau of Finance  Registration with local Bureau of Statistics  Customs Registration (if needed)14 28 September 2012 - Chester Beatty Library
  15. 15. Building Establishment of a WFOE Bridges to China Documents Required:  Incorporation certificate of the parent company  Good standing letter regarding the parent company issued by its bank  Board resolution of the parent company  Articles of associations of the WFOE  Director Appointment Letter issued by the parent company  Project feasibility study report  Lease agreement in connection with the premise of the WFOE  Completed application letter/ forms  Other documents to be required by the approval authority on a case by case basis15 28 September 2012 - Chester Beatty Library
  16. 16. Building Bridges to JVC China Letter of Intention Environmental Impact Assessment Pre-approval of JVC’s Name Approval for Initiating the JV Project Apply for Uniform Institutional Code and I/E Enterprise Code Open Account for Capital Examination and Approval Contribution Verifying Capital Contribution Issuing Approval Certificate of JV Company Registration of Establishment of JVC Prepare Corporate Seal Registration with Foreign Exchange Control Authority Registration with Statistics Open Current/Capital Account Authority with Bank Registration with Financial Authority Registration with Taxation Authority Registration with Labor & Social Insurance Authority Registration with Customs16 28 September 2012 - Chester Beatty Library
  17. 17. Building Bridges to WFOE, CJV or EJV? China WFOE CJV EJV Formation LLC LLC LLC Approval Time 90 days 45 days 90 days with MOFCOM Profit sharing N/A As agreed Same as the contribution sharing Management Board of Flexible measures Board of Directors Directors and GM Transferability of N/A Subject to other parties’ approval. Shares17 28 September 2012 - Chester Beatty Library
  18. 18. Building General Procedures for Rep Office Establishment Bridges to China Step 1: Application for the special administrative approval (if applicable) Step 2: Application for the Registration Certificate & Representative Certificate with local Administration of Industry and Commerce Step 3: Registration with local Public Security Bureau and chop carving Step 4: Application for organisation code with the local Technology Supervision Bureau Step 5: Registration with local Bureau of Statistics Step 6: Application for tax registration (including registration with State Administration of Taxation and with local Taxation Bureau) Step 7: Foreign exchange registration & opening bank account Step 8: Application for importing and exporting rights with the customs (if needed)18 28 September 2012 - Chester Beatty Library
  19. 19. Building Bridges to Rep Office Establishment China Documents required:  Application forms  Authorisation letter from the Chief Representative in assigning one employee applying for the Registration Certificate  Application letter in setting up a Representative Office  Articles of incorporation or organisation agreement of the company (i.e. the headquarters)  The domicile certification and certification on legitimate operation for more than two years continual existence of the company (i.e. the headquarters) – new  Notarisation of the Certificate of Incorporation of the company (i.e. the headquarters)  Bank letter stating the financial and credit standing of the company (i.e. the headquarters)  Appointment Letter from the headquarter with the board resolution in assigning the Chief Representative  Resume of the Chief Representative and other Representatives  Documents identifying the registered address of the rep office (certificate of ownership or rental agreement)19 28 September 2012 - Chester Beatty Library
  20. 20. Building Bridges to M&As China  Approval: Ministry of Commerce or its Local Branches  Transaction Agreement  Amended Articles of Association  Valuation Report  The Certificate of Incorporation of Buyer  The Appointment Letter of New Directors  The Reference Letter issued by the Buyer‟s bank  Completed Forms  Application Letter  Registration: The Bureau of Industry and Commerce  Post-Transfer Registration: Tax, Foreign Exchange, etc.20 28 September 2012 - Chester Beatty Library
  21. 21. Building M&A Due Diligence in China – Typical Findings Bridges to China  Target company often inexperienced with international transactions  Language barriers and cultural differences  Insufficient reporting  Many documents not available; information needs to be obtained by management interviews and own research  Financial information and contracts often not up to international standards  Ownership structures often complex and not transparent  Soft factors: local practice and „guanxi‟21 28 September 2012 - Chester Beatty Library
  22. 22. Building Bridges to 2. Legal Issues in Daily Operations China  Employment  Tax  Intellectual property (patent, trademark, copyright)  Real estate22 28 September 2012 - Chester Beatty Library
  23. 23. Building Bridges to Employment China Labour Contract Law 2008 (Interpretation 2009)  No temporary employment  Representative office: FESCO  Confidentiality clause  Non-competition clause23 28 September 2012 - Chester Beatty Library
  24. 24. Building Bridges to Tax China  Authorities: state level and local level  Primary types of taxes: VAT (17%), business tax (3-20%), enterprise income tax (25%), consumption tax  Foreign businesses and individuals: resident v non-resident  Preferential treatment on FIE: tax return24 28 September 2012 - Chester Beatty Library
  25. 25. Building Bridges to Intellectual Property China  Patent: invention, utility model, industrial design  Trademark  Copyright  Trade secret  Trade name25 28 September 2012 - Chester Beatty Library
  26. 26. Building “Copycat Culture” Bridges to China26 28 September 2012 - Chester Beatty Library
  27. 27. Building Bridges to IPR Enforcement China  Civil: economic compensation  Criminal: sentence of 3-7 years plus fines  Administrative: fines, seizure of products or illegal income, revocation of licence, suspension of business, etc.27 28 September 2012 - Chester Beatty Library
  28. 28. Building Bridges to Real Estate China  Land ownership − State-owned (urban area) and collectively-owned (rural area) − Individuals: leasehold only  Eligible foreigners to purchase real estate for own use? − Subsidiaries or representative offices of foreign institutions, or foreign individuals who have been in China for over one year  Investing in real estate development − Restricted sector, only joint venture28 28 September 2012 - Chester Beatty Library
  29. 29. Building Bridges to Legal Environment China  Vague legal provisions  Conflicts: by-laws made by different authorities  Government authorities act as law interpreters  Confucianism / rule of law?29 28 September 2012 - Chester Beatty Library
  30. 30. Building Thank you Bridges to China30 28 September 2012 - Chester Beatty Library
  31. 31. Building Bridges to China Enwright de Sales Managing Director | AP ICE | Ireland Tax Services Deloitte AP ICE31 28 September 2012 - Chester Beatty Library
  32. 32. Building Bridges to China Tax Considerations for Businesses Setting up in China32 28 September 2012 - Chester Beatty Library
  33. 33. Building Bridges to Agenda China  China Tax Trends  Overview of China’s Current Tax System  Tax Administration  Legal Entity Structuring Considerations and Anti-Abuse Measures  Evolving strategies  Business Model Optimization  Transfer Pricing  VAT reform33 28 September 2012 - Chester Beatty Library
  34. 34. Building China Tax Trends Bridges to China Overview of China‟s Current Tax System Description Income Tax system Tax on worldwide income of a Chinese legal entity or entity that is “managed & controlled” in China Company Income Tax 25% (or lower from 0% - 15% per tax incentives) Individual Income Tax Up to 45% based on earning level Dividend WHT 10% or lower treaty rate (5%) Interest WHT 10% or lower treaty rate Royalty WHT 10% or lower treaty rate Capital gains 10% WHT or exemption under a few treaties Customs duty Varying depending on tariff codes (and country of origin for imported goods) VAT Standard VAT rate 17% (other rates apply on the specified categories of entities/ industries); 0% VAT on exports; export VAT refund rates varying depending on tariff codes BT 3% - 20% depending on the different service sectors Local surcharges 6% - 14% (depending on different locations in China) based on the VAT and (CCMT, ES, LES, etc.) BT payable34 28 September 2012 - Chester Beatty Library
  35. 35. Building China Tax Trends Bridges to China Overview of China‟s Current Tax System (Cont‟d) Description Loss carry forward period 5 years Consolidation Not available Thin Capitalization Yes Special reorganization Yes, but limited applicability thus far rules Filing requirements Corporate returns due within five months after the end of tax year (May 31) Transfer pricing  Similar to OECD principles and guidelines  Formal contemporaneous TP documentation rules  Advance Pricing Agreement is available General Anti-Avoidance Similar to OECD principles and aggressive Rules (GAAR) implementations Treaties 95 Income tax treaties, 12 FTAs35 28 September 2012 - Chester Beatty Library
  36. 36. Building China Tax Trends Bridges to China Tax Administration The China tax authorities have increased its scrutiny and compliance requirement with respect to non-resident taxation and cross border transactions:  Service contracts between Chinese taxpayers and foreign companies;  PE registration and filing requirement;  Activities undertaken by foreign companies through their own or affiliates‟ representative offices in China;  Tax treaty benefit application;  Indirect share transfer; and  Import/ export transactions (especially with the overseas related parties) The Chinese tax authorities have increased the use of anti-avoidance rules and intensified tax audits36 28 September 2012 - Chester Beatty Library
  37. 37. Building China Tax Trends Bridges to New Tax Challenges Faced by MNCs China Managing effective tax rate Dealing Optimization with tax audit/ of investment tax disputes Your Chinese holding structure Operation Transfer pricing Indirect tax and policy and risk customs risk management management on RPTs37 28 September 2012 - Chester Beatty Library
  38. 38. Building Bridges to China Legal Entity Structuring Considerations38 28 September 2012 - Chester Beatty Library
  39. 39. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to Comparison of Popular China Treaties China China’s China- China- China- China- China- China- China- China- U.K. domestic Hong Barbados Ireland Luxembourg Mauritius Netherlands Singapore rate Kong (New) Dividends 10% 5/10% 5/10% 5/10% 5/10% 5% 10% 5/10% 5/10% Interest 10% 7% 10% 10% 10% 10% 10% 10% 10% Royalties 10% 7% 10% 6/10% 6/10% 10% 10% 6/10% 6/10% Capital 10% 0/10% 0/10% 0/10% 0/10% 0/10% 10% 0/10% 0/10% Gains Domestic GAAR N/A Yes Yes No No No No Yes Yes Override39 28 September 2012 - Chester Beatty Library
  40. 40. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to Various Rules China Payments offshore: increased reporting and scrutiny  Threshold for tax clearance lowered: US$30,000  Tax treaty benefits (Circular 124) – Pre-approval required  Dividends  Interest  Royalties  Capital gains  Increased reporting Continuing focus on strategies perceived as abusive  Anti-treaty shopping  Circular 601 (“beneficial ownership”)  Circular 698 (transfers of shares in Chinese companies by non-resident companies)40 28 September 2012 - Chester Beatty Library
  41. 41. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to Case Study China  A Group, a Chinese based group established A Group BVI Co, which owns HK Co, which in turn owns A Group’s Chinese operations.  The local tax authority deemed HK Co a Chinese M Co BVI Co tax resident. Luxembourg -Guoshuifa [2009] 82 & Bulletin [2011] 45 25%+  M Co, a Luxembourg company, purchased 25% One Share plus one share of the HK Co, applied for 5% HK Co withholding tax rate on dividend distribution from HK Co under China-Luxembourg treaty. China  The tax authority denied the treaty benefit A Group because M Co did not own at least 25% during the 12-month period preceding the share transfer.  Is ―12-month‖ period a condition for treaty relief under China-Luxembourg treaty?41 28 September 2012 - Chester Beatty Library
  42. 42. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to “Beneficial Ownership” Rules China  Circular 601 generally in line with Parent OECD commentary − Generally, engaged in substantive business activities Super Holdco − Has the full privilege/control over the HK income received  What substance at Holdco level is sufficient? Must have other operating Holdco 1 Holdco 2 HK HK activities?  Can substance in Super-Holdco be attributed to intermediate Holdcos? WFOE1 WFOE2  Practice in obtaining approval from the Chinese tax authorities42 28 September 2012 - Chester Beatty Library
  43. 43. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to Indirect Share Transfer (Circular 698) China  Reporting requirement for indirect share transfer which satisfies either of the following conditions: − The actual tax burden on gain arising from transfer of intermediate holding company in the offshore jurisdiction is less than 12.5%; or − The jurisdiction in which the offshore intermediary holding company resides provides an income tax exemption for capital gain  Reporting deadline: 30 days after the signing of the share transfer agreement43 28 September 2012 - Chester Beatty Library
  44. 44. Building Legal Entity Structuring Considerations and Anti-Abuse Measures Bridges to Indirect Share Transfer (Circular 698) (Cont‟d) China  Information required to be disclosed: − Share transfer agreement. Where the sale is part of a group sale, the group sales agreement is required. A separate price allocation for China Co is required − Relationship between the seller and the offshore holdco, and the offshore holdco and China Co, with respect to finance, personnel and buy-sell transactions, etc. − Offshore holdco’s production, business operations, finance, HR, assets, etc. − Business purpose for setting up the offshore holdco − Other documents required by the tax authority − Chinese language requirement  The non-resident seller’s tax liability is not described in detail in Circular 698 – instead, focus is on information disclosure  However, it is clear that the tax authorities will study the information to determine whether GAAR should be applied to impose a tax liability on the non-resident seller  Any safe harbor rule?44 28 September 2012 - Chester Beatty Library
  45. 45. Building Evolving Strategies Bridges to China Repatriation Strategy China China‟s regulatory regime, in particular its foreign exchange rules, continues to inhibit many tax base erosion techniques that multinational companies have been able to use in other jurisdictions. PRC Tax Alternatives Remarks Implications BT – 3-5%  If there is no PE, there will be no EIT. Onshore EIT – 25%  The ranges of deemed profit rates are set out for various categories of activities, Service Fees *(in case of PE) normally from 15% to 50% BT- 3-5%  Tax authority may request supporting documents to prove the services are genuine and Offshore No EIT all rendered outside China Service Fees  It could be practically difficult to satisfy the PRC tax bureaus that all services are rendered outside China. No BT  Dividends cannot be declared and remitted until the company has made up its losses. Dividends WHT – 10%-  Only the qualified beneficial owner could be eligible to enjoy the reduced WHT rate as provided in the tax treaties. Royalty (General) BT – 5%  The BT payable should not be deductible for WHT purpose. WHT – 10% Royalty WHT – 10%  Technology transfer may be exempt from BT Technology Tansfer Royalty Software WHT – 10%  Software licensing may be exempt from BT Licensing BT-5%  The amount of shareholder’s loan would be subject to the approved total investment Interest WHT – 10% /registered capital ratio of the company.  Interest deduction for related-party borrowing is subject to the thin capitalization rules for EIT purpose. Import Value Duty  The applicable duty rates vary depending on tariff codes and country of origin. Adjustment VAT – 17% Duty  Export duty is due on a limited number of categories of goods which are restricted from Export Value VAT – 0% export. The applicable duty rates vary depending on tariff codes. Adjustment Export VAT refund  The applicable export VAT refund rates vary depending on tariff codes.45 28 September 2012 - Chester Beatty Library
  46. 46. Building Evolving Strategies Bridges to Why Business Model Optimization (BMO)? China Corporate Tax Limited availability of incentives and application of WHT VAT & Customs FOREX/Regulatory Export VAT refund Issues restrict costs; trading restrictions for Business flexibility on tax planning in China foreign principals Model Optimization Transfer Pricing Business Tax More aggressive Multiple layers application of arm’s of BT increase length standard overall costs46 28 September 2012 - Chester Beatty Library
  47. 47. Building Evolving Strategies Bridges to BMO Options in China China Item Option I Option II Option III Toll manufacturer Contract manufacturer Licensed manufacturer Profit Level Lowest Median Highest Government Approval Required Required, easier than option 1 Not required Domestic Sourcing Less flexibility of direct local Domestic sourcing is also No restriction in direct local sourcing, generally majority of the permitted as long as the product sourcing raw materials shall be imported (i.e., using the bonded RM is exported either direct import or use a bonded logistics park (―BLP‖) for local raw materials) Domestic sales Restricted in direct domestic sales Less restricted in direct sales then No restriction in direct domestic option 1 sales VAT Cost Non-recoverable VAT cost = Non-recoverable VAT cost = Non-recoverable VAT cost = Input VAT of domestic sourced (Export sales – Purchase of bonded Export sales * (VAT rate 17% – VAT materials and utility imported materials) * (VAT rate 17% refund rate) – VAT refund rate) Benefits  Very limited functions and risks in  Reduced functions and risks in China China  Profits outside of China not  Profits outside of China not subject to foreign currency subject to foreign currency exchange controls exchange controls  Eliminates any BT on royalty or  Eliminates any BT on royalty or services services Considerations  Regulatory limitations on China  Transfer pricing  BT at 5% on royalties/ services if Co entering a toll agreement  Dual business models for export not exempt  Exemption from VAT on tolling and domestic markets  Transfer pricing fee  Migration and implementation  Transfer pricing costs  Dual business models for export and domestic markets47 28 September 2012 - Chester Beatty Library
  48. 48. Transfer Pricing48 © 2012 Deloitte AP ICE Limited
  49. 49. Building P.R.C. Specific TP Requirements Bridges to China  P.R.C. TP regulations generally follow the OECD Guidelines in terms of the arm’s length principle, TP methods, comparability analysis etc. Some specific requirements are as follows:  Detailed annual filing requirements of tax payer‟s related party transaction;  Starting from 2008, all enterprises are required to prepare and maintain with the following exemptions:  Annual related party buy/sell transactions < RMB 200 million (toll processing amount calculated based on declared import and export value to Customs) and other related party transactions < RMB 40 million;  Foreign shareholding < 50% and only transact with domestic associated enterprises;  Transactions covered under an APA  Contemporaneous documentation must be prepared by May 31 of the following year and must be submitted within 20 days upon tax bureau’s request. Documentation must be in Chinese and must be maintained for 10 years.49 28 September 2012 - Chester Beatty Library
  50. 50. Building P.R.C. Specific TP Requirements (continued) Bridges to China  Capital Intensity adjustments are not allowed “in principle”;  Tax authority can use public or non-public information to analyze whether related-party transactions conform to the arm‟s length principle;  Enterprises with single production or distribution or contract R&D function and limited risks are not allowed to incur losses;  Offsetting transactions need to be evaluated separately;  If the profitability of the audited enterprise is lower than the median (even within the interquartile range), in principle adjustments to median of interquartile range will be made during an audit; and  The statute of limitation for transfer pricing audits is effectively ten years.  TP audits often start with the most recent three years50 28 September 2012 - Chester Beatty Library
  51. 51. Building Recent Developments in TP Audit Bridges to China  Audit transactions extended from tangible property buy/sell transactions to services, IP and share transfer  In 2011, TP audit was extended to financial, trading, and service companies  The SAT will form an economist group for strengthen the TP compliance enforcement  SAT has started investigations on Thin Capitalization, as well as General Anti-avoidance  SAT has paid more attentions to location saving, marketing intangible recently51 28 September 2012 - Chester Beatty Library
  52. 52. Building What Can You Do to Mitigate TP Risks in China? Bridges to China TP Planning  TP risks can be mitigated if the taxpayers in China can plan their TP policy ahead. You are expected to integrate TP issues with other tax considerations and current trends to make sure strategies in one area do not counteract other effects. TP Documentation Preparation  TP documentation must demonstrate that the taxpayers policies are in line with the arms length standard by applying regulatory requirements for appropriate methodologies. You should ensure that the companys documentation requirements are addressed in an efficient and effective manner, represent sound economic analysis, and that your transactions are documented in a consistent, integrated and systematic manner. Advance Pricing Arrangement  An APA helps taxpayers plan for future tax liabilities, reduce the risk of non-compliance, and minimize the time and cost of compliance on a yearly basis. The taxpayers are encouraged to seek professional assistance on the above mentioned points to mitigate their TP risks in China52 28 September 2012 - Chester Beatty Library
  53. 53. VAT Reform in China © 2012 Deloitte AP ICE Limited
  54. 54. Building VAT Reform Bridges to Introduction China  China VAT reform pilot commenced on 1 January 2012 in Shanghai, applicable to transportation and certain modern service sectors, with the intention that the pilots would eventually be expanded nationwide.  VAT Reform aims to resolve the double/multiple taxation under China‟s current indirect tax system.  China‟s State Council has announced the timeline of VAT Reform pilot rollout to the following: Cities Date of launch Beijing 1 September 2012 Jiangsu, Anhui 1 October 2012 Fujian, Guangdong 1 November 2012 Tianjin, Zhejiang, Hubei 1 December 2012 Service Sector VAT rate Leasing of tangible movable property 17% Transportation services 11% Information technology (IT) services 6% Cultural and creative services 6% Research and development (R&D) and technical services 6% Logistics and ancillary services 6% Certification and consulting services 6%54 28 September 2012 - Chester Beatty Library
  55. 55. Building VAT Reform Bridges to Impact China55 28 September 2012 - Chester Beatty Library
  56. 56. VAT Reform Building Bridges to Important Issues to be Considered China56 28 September 2012 - Chester Beatty Library
  57. 57. Building Bridges to China Important notice This document has been prepared by Deloitte AP ICE, Limited for the sole purpose of providing a proposal to the parties to whom it is addressed in order that they may evaluate the capabilities of Deloitte AP ICE, Limited to supply the proposed services. The information contained in this document has been compiled by Deloitte AP ICE, Limited and includes material which may have been obtained from information provided by various sources and discussions with management but has not been verified or audited. This document also contains confidential material proprietary to Deloitte AP ICE, Limited. Except in the general context of evaluating our capabilities, no reliance may be placed for any purposes whatsoever on the contents of this document or on its completeness. No representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Deloitte AP ICE, Limited or by any of its directors, members, employees, agents or any other person as to the accuracy, completeness or correctness of the information contained in this document or any other oral information made available and any such liability is expressly disclaimed. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person in whole or in part without our prior written consent. This document is not an offer and is not intended to be contractually binding. Should this proposal be acceptable to you, and following the conclusion of our internal acceptance procedures, we would be pleased to discuss terms and conditions with you prior to our appointment. In this document, Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the ―Deloitte Network‖) is by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. © 2012 Deloitte AP ICE, Limited57 28 September 2012 - Chester Beatty Library
  58. 58. Building Bridges to China Contact Enwright De Sales Managing Director | AP ICE | Ireland Tax Services Deloitte AP ICE, Limited 35/F One Pacific Place, 88 Queensway, Hong Kong Direct: +852 2852 1078 e-mail: ejdesales@deloitte.com58 28 September 2012 - Chester Beatty Library
  59. 59. Building Bridges to China Kevin Sherry Head of International Sales and Partnering, Enterprise Ireland59 28 September 2012 - Chester Beatty Library
  60. 60. Building Bridges to China ―Doing Business in China‖ Kevin Sherry Enterprise Ireland 28th September 201260 28 September 2012 - Chester Beatty Library
  61. 61. Building Enterprise Ireland Mission Bridges to China61 28 September 2012 - Chester Beatty Library
  62. 62. Building Its all about Exports and Jobs Bridges to China62 28 September 2012 - Chester Beatty Library
  63. 63. Building Highlights 2011… Bridges to China63 28 September 2012 - Chester Beatty Library
  64. 64. Building Bridges to China Enterprise Ireland International Offices North America & South America Southern Northern Europe Germany, Central & Asia Pacific Canada Sao Paulo Europe, Middle East London Eastern Beijing Singapore Boston & Africa Paris Europe, Russia Shanghai Delhi New York Milan Amsterdam Düsseldorf Hong Kong Sydney Silicon Valley Madrid Brussels Prague Tokyo Toronto Dubai Stockholm Budapest Seoul Riyadh Warsaw Johannesburg Moscow64 28 September 2012 - Chester Beatty Library
  65. 65. Building Bridges to Map of China and EI offices China Beijing Shanghai Hong Kong65 28 September 2012 - Chester Beatty Library
  66. 66. Building Bridges to Irish Trade with China (€ 000’s) China 2008 2009 2010 2011 2012 (Jan - July) Exports 2,549 2,668 2,579 2,531 1,409 to China Imports 4,811 3,159 2,919 2,893 1,716 from China 7,360 5,827 5,498 5,424 3,125 Source: CSO66 28 September 2012 - Chester Beatty Library
  67. 67. Building Ireland and Greater China Region Bridges to China  240 + Irish Co’s actively exporting to China, 140 with a full time presence  Irish company exports to Greater China grew by 29% in 2011  Sectors of Opportunity; – Internationally traded services (inc Education) – Aviation Services – Food / Drink – Agricultual Machinery and Technologies – Financial Software and Services – Mobile Telecommunications Software – E- learning – Information Security – Environment / Cleantech – Equine – Lifesciences / Medical Devices67 28 September 2012 - Chester Beatty Library
  68. 68. Building Some Leading Exporters to China Bridges to China Education, Dairy, Meats, Beverages, Aviation, Construction Services68 28 September 2012 - Chester Beatty Library
  69. 69. Building Bridges to Some Leading Exporters to China China Consumer, Electronics, Diagnostics, Waste Management, Industrial Controls, Medical Devices, Component Sub Supply, Mobile Internet, Payments, Travel, Healthcare Informatics69 28 September 2012 - Chester Beatty Library
  70. 70. Building Bridges to High Level Visits Important China  H.E. Xi Jinping, Vice President of China – visit to Ireland (Feb 2012)  MoS Ciaran Cannon, (Dept of E&S) Beijing - Shanghai (17 Institutes)  Taoiseach + Minister Bruton (HK/Shenzhen/Shanghai/Beijing) (+ 90 Co’s) - March  Minister Coveney – Food/Agritech Mission (+ 50 Co’s) - April  Minister Reilly – Lifesciences / Medical - August  Minister Hogan - September70 28 September 2012 - Chester Beatty Library
  71. 71. Building Bridges to China HE Mr. Xi Jinping, Vice-President of the People’s Republic of China, speaking at the Royal Hospital Kilmanham for the Ireland-China Trade and Investment Forum. Feb 201271 28 September 2012 - Chester Beatty Library
  72. 72. Building Bridges to China H.E. Mr Xi Jinping , Vice President of the Peoples Republic of China with President of Ireland Michael D. Higgins in Aras An Uachtarain were the two held talks on the third and final day of a three day visit to Ireland. Feb 201272 28 September 2012 - Chester Beatty Library
  73. 73. Building Bridges to China Taoiseach and Minister Bruton, Dept of Job, Enterprise and Innovation lead a Trade Mission to China with over 90 Irish companies. The Delegation visited Hongkong, Shenzhen, Shanghai and Beijing. Mar 201273 28 September 2012 - Chester Beatty Library
  74. 74. Building Bridges to China Minister Coveney, Department of Agriculture, Food and Marine lead a Agriculture Trade Mission to China. April 2012.74 28 September 2012 - Chester Beatty Library
  75. 75. Building E.I. in Market Services Bridges to China  Market research  Partner/Distributor identification  Visit logistics  Visit itineraries  Events participation & management  Translation/Interpreters  Legal advice/Third party services  Incubator facilities  After sales/follow up EI Country Manager: alan.buckley@enterprise-ireland.com High Growth Markets Dublin: philip.singleton@enterprise-ireland.com75 28 September 2012 - Chester Beatty Library
  76. 76. Building Establishing a Presence Bridges to China Options  Distributor/Agent  Representative office (RO)  Joint venture (JV)  Wholly Foreign Owned Enterprise (WFOE)  Foreign Invested Commercial Enterprise (FICE)76 28 September 2012 - Chester Beatty Library
  77. 77. Building Bridges to Sourcing from China China  Sourcing  Supplier Management is key  The Long Distance Relationship ……..  You get what you “INSPECT”, not what you “EXPECT”77 28 September 2012 - Chester Beatty Library
  78. 78. Building Bridges to Usual Risks China  Political  Economic  Financial  Environmental  Intellectual Property  Language  Cultural  Bureaucracy78 28 September 2012 - Chester Beatty Library
  79. 79. Building Bridges to I.P.R. China  Register your I.P. in China  IF YOU DON’T SHOW VALUE TO YOUR I.P. WHO ELSE WILL ?79 28 September 2012 - Chester Beatty Library
  80. 80. Building Language Bridges to China ―Promise-Keeping Enterprise‖ ―When old man’s child go up hand ladder temporary need the family to accompany‖80 28 September 2012 - Chester Beatty Library
  81. 81. Building Doing Business in China Bridges to China A Profile For Success  Leave preconceptions at home  Do your homework  Patience  Focus  Long-term approach  Professional advice  IPR  Due diligence81 28 September 2012 - Chester Beatty Library
  82. 82. Building Bridges to China 2012 ACCESS CHINA —A Guide to doing business in China More on www.enterprise-ireland.com82 28 September 2012 - Chester Beatty Library

×