High Tech tax concessions in China

16 March 2007, Chinese authority issued new Corporate Income Tax(¡°CIT¡±) law, the new CIT law has taken effective from 1 January 2008. New CIT law rules that High Technology enterprise can enjoy tax incentive policies...

Start for 2007 ¨CVarious tax changes taken effect

China tax reform is processing in a steady and cautious manner. A host of taxes, including corporate income tax, value-added tax (VAT), the resources tax and land use taxes will be covered by the reforms. From the beginning of year 2007, several taxes step into new stage......

Happy New Year !!!!

Spring Festival starts on 18th February, with Chinese New Years Eve being 17th. We would like to wish everyone Happy New Year and a healthy, happy and prosperous year of the Pig! Year 2007, or per Chinese calendar 4704, is  Red Pig Year, otherwise known as Female Fire Pig year. People born in year of Pig are lucky, mild tempered, enjoy eating all of the time, love sleep and they worry very little. Red Pig Astrology Year actually starts on 4th February China time zone at 13.18, which is the official "start of spring", not on New Years Day, as commonly thought.

"Zhong Qiu Kuai Le" ---- Happy Mid Autumn Festival !!!!

The Moon festival (also called the Mooncake or Mid-Autumn festival) falls on October 6 in the year 2006. What is the Moon festival? Every year on the fifteenth day of the eighth month of the lunar calendar, when the moon is at its maximum brightness for the entire year, the Chinese celebrate "zhong qiu jie." Children are told the story of the moon fairy living in a crystal palace, who comes out to dance on the moon's shadowed surface. The legend surrounding the "lady living in the moon" dates back to ancient times¡¡

China Moves Again to Cool Overheated Property Sector

Housing prices in China have surprised almost everyone by surging since 2000, despite the government¡¯s efforts to cool them down, the property developers' expectation for steady growth and the experts' fear of a bubble burst. The nation's investment in real estate increased at an annual rate of more than 20 per cent for five consecutive years starting from 2000. Although the growth rate has dropped in 2005, it was still at 19.8 per cent.

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Debt Collection in China

While Debt Collection in China is merely one of the multifarious challenges faced by a Joint Venture and Foreign Invested Enterprise (FIE), it is ultimately the most important. One can enter the Chinese market safely and integrated itself successfully but in order to gain profitability, a company must understand the Debt Collection process in China.

LehmanBrown has attended the 9th China International Fair for Investment & Trade

LehmanBrown has attended the 9th China International Fair for Investment & Trade (CIFIT) from Sept. 8 to 11, 2005 at the International Conference and Exhibition Center, Xiamen, China. Sponsored by the Ministry of Commerce of the People's Republic of China , co-sponsored by UNCTAD, WAIPA, UNIDO, IFC and Patron by OECD, the CIFIT is the sole nation-wide international investment promotion event focusing on foreign direct investment.

Feature article - Export VAT Rebates and Exemption under China's Tax System

This issue of "Peeling the Onion" is thus meant to bring some light into the dark labyrinth of export VAT application procedures. For those who have just pitched their tents in China and for those on their way to do business in China, we will start with an overview about the current VAT system.

China's Financial Markets

The main function of any financial market is, in combination with an effective banking system, to allocate capital efficiently to those groups who will use that capital in the most productive manner. If this occurs, funds are guided into businesses that will produce a fair return to investors with respect to the individual project's risk. This consequently provides a benefit to the overall economy as a sound system is created where funds can be invested by the public and corporations which are then put to good use in the business world. Is this happening in China?

M&As in China: Opportunity or Hornet's Nest?

The strategic use of merger and acquisition in the People's Republic of China has only begun to proliferate in recent years, mainly due to the easing of legal restrictions which had previously acted as a significant roadblock.
Until the beginning of the 1990s, Chinese law did not readily permit foreign investors to invest in other China-based companies, even if they had existing PRC operations in the form of a Foreign Invested Enterprise (FIE). This served to stifle M&A activity and led to foreign investment in China being relatively inefficient. However, during the last decade significant progress has been made and major M&A deals are now commonplace.

Compliance, Compliance and more Compliance...keeps the China authorities away!

Setting up a business in China involves a lot of paperwork, as anyone who has already done this will know. This though is the easy bit, maintaining the legal entity you have set up starts from the moment you receive your business license. There is no dormant status for companies in China, once alive they are required to prepare accounts, complete annual audits and file for taxes, even if nil filing when loss making.

Tranfer Pricing Investigations...When not If!

China's tax system has experienced great changes in 1994, with rapid economic development creating a necessity for the tax system to grow and adapt, and new laws are continually being implemented to replace outdated laws. According to Commissioner of the State Administration of Taxation, one of the main tasks for the 10th five-year plan (2001-2005) is to carry out further reform on the current tax system. It is expected that the 11th five-year plan will continue along the same lines. Additionally, China¡¦s accession to WTO required changes in areas such as import duties and its changes such as these, which are in turn driving other changes in order to maintain revenue balance. With these China has been improving its collection and management systems and regulations in relation to these.

The Changing Role of CFOs and Accountants in China

Accountants in China have something of a tough time, often perceived by senior management as expensive cost centres with little real value to add to the future growth of a company. Most of the local accounting firms focus on audit services, which, whilst teaching a good grounding in compliance rules and risk identification, do not necessarily teach value-adding or strategic thinking. Accountants in China therefore need to try and move towards the role of being a member of decision-making groups within an organisation.

Bridging the Accounting Standards Gap in China

Given the differences that exist in China between Chinese GAAP and International Accounting Standards (IAS), in order to satisfy the requirements of the Chinese authorities and the requirements of the overseas head office, foreign enterprises based here are typically required to prepare two sets of financial statements. This article will help foreign invested enterprises (FIEs) in China to understand the importance of bridging the gap between Chinese GAAP and IAS for management reporting purposes.

Mergers & Acquisitions in China

Given the relatively limited number of investment vehicles available to foreign investors looking to enter into the lucrative Chinese market, the emergence of mergers and acquisitions (M&A) in China are a welcome surprise. The market has been slower to pick up than many had anticipated, but the potential still exists and M&A is one of the quickest ways for new and existing foreign investors to expand their market share in the current Chinese legal and business environment.

The Banking System in China

The emergence of a wealthy Chinese middle class coupled with recent regulations designed to facilitate growth has the banking industry in China poised for massive growth. On the other hand, Chinese banks are plagued by bad debts and inefficiency, and face a huge potential loss of customers to their foreign counterparts. Depending on whom you ask, banks in China are either on the verge of bust or boom and this article will to help unravel some of the more complicated intricacies of banks in China.

Treasury Management in China

WTO entry may not be the miracle needed to revolutionise treasury operations in China, but companies are certainly starting to benefit from gradual improvements in the system. Treasury management in China is changing rapidly. The road ahead will require a great deal of patience but offers potentially massive rewards.

Managing Your China Business Under SARS

Whether you have made the decision to stay and weather the storm, both financially and medically, or you have decided that it might be safer to let your Chinese partner or employees handle things for the time being whilst you sit out the crisis back home, there are a number of considerations for effectively managing your China business under SARS.

Establishing an SME in China

The race to China has begun for many SMEs, but many still don't understand what training they are required to do before venturing into the largest consumer market in the world. This article covers the most important issues in establishing a presence in China, whilst providing useful insights into some of the major hurdles faced by multinational SMEs on the way.

Internal Audits in China

Many FIEs in China continue to look to the past to manage and control risk. However, new factors influencing the current business environment are forcing companies to re-focus the energies into identifying and controlling risk, as well as opportunities for process improvement and overall business analysis.

The Chinese Tax Environment

As import duties fall, preferential tax policies are wound back and the tax base is shifted, the tax environment in China is a rapidly changing landscape. Many FIEs however are still not in compliance with these changes and possibly face large penalties. With over one-third of Representative Offices caught underpaying taxes in recent years, are you sure your company is compliant?

Crisis Management in China

In the current business environment companies need to be prepared for things to go wrong. Whilst Head Office management generally are trained to deal with crises, many operations are in China are left to fend for themselves. In this article we examine the inner workings of a crisis management team and how to execute a corporate strategy when things go wrong.

Corporate Valuations in China

Multinationals are looking to China to diversify consumer markets, drive cost cutting strategies and examines the factors that cause many multinationals to misjudge the real value in corporate acquisitions and divestitures in China.

Solving the Problem of Business Fraud in China

If head office ponders why their China operations are not profitable, they possibly should be looking in their own backyard! This article analyses some of the problems of business fraud that many multiantionals in China face and the ways to limit the exposure.

Transfer Pricing Solutions in China

This article investigates how companies have been able to minimise their tax obligations in China through moving profits off-shore. However, the Chinese government is cracking down on this practice and catching many multinationals out with large tax obligations.

Due Diligence in China

This article investigates the critical issues and importance of conducting comprehensive business due diligence on Joint Venture partners and business operations in the China. Includes advice on what to look out for, what can go wrong and how to protect your investment.