China Business Newsletters

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China Newsletter | October 2014

New regulations to boost corporate transparency in China

In an effort to improve organizational transparency, the PRC government issues a new regulation on disclosure of corporate information which will encourage public reporting and restrict the interference of authorities to monitoring of information disclosure.

China Newsletter | September 2014

WFOE SET-UP IN THE SHANGHAI FREE TRADE ZONE

Shanghai has undergone an amazing number of reforms over the past year, since the launch of its Free Trade Zone. And a lot is still on the way, making setting up in Shanghai to look better than anywhere else. But does this make sense for you? Discover an overview of a year of reform in the Zone.

JOINT VENTURES IN CHINA: HOW TO MAKE YOUR PARTNERSHIP SUCCESSFUL

CHINA NEWSLETTER | AUGUST 2014

Representative Office Incorporation in China: Goods and Bads

Representative Offices are the cheapest, fastest and easiest way to incorporate in China. This structure enables you to sense the market, understand its dynamics, taking your first steps in China. However, such advantages come at a cost: they are not allowed to conduct business in China.

China Newsletter | July 2014

How to avoid the Cash Trap: strategies to repatriate profits from China in 2014

Sino-French Double Tax Treaty

On November 26th, 2013 French and Chinese governments have agreed upon a double tax treaty aiming at reducing taxes on companies investing in both France and China. The update was much needed since this text had not been modified for 30 years. It aligns with the tax treaties China has signed with the other European countries.

CHINA REVAMPING INCENTIVES TO FOSTER SMALL PROFIT BUSINESSES

In China, small businesses hold the majority among the total number of enterprises in China. Considering the small businesses as one of the driving factors for the Chinese economy, the PRC government has decided to offer them some preferential income tax rates and VAT exemption which is subject to a certain qualifications as discussed in this newsletter. This is expected to ease off their tax burden to a certain extent allowing them to save more cost, thus, make more margin.

China eases control over overseas remittance

A further and encouraging step was taken by the State Administration of Taxation (SAT) jointly with the State Administration for Foreign Exchange (SAFE) to ease the process of dealing with overseas remittances. The new regulation was issued on July 09, 2013 and implemented and put into force on September 01, 2013.

CHINA AMENDS COMPANY LAW: INTRODUCES REFORMS TO THE REGISTERED CAPITAL SYSTEM

 

On December 28, 2013, China adopted a new amendment to the company law which will become effective on March 01, 2014. All the changes listed here have already been in force in the Shanghai Free Trade Zone. Following are the details of the changes in registered capital system:

SHANGHAI ISSUES IMPLEMENTATION RULES ON VAT EXEMPTION FOR EXPORT SERVICES

KEY HIGHLIGHTS OF ANNOUCEMENT 3:

  • Releases implementation rules concerning requirements and procedure for the filing of VAT exemption for export services
  • Offers solutions for the clearance of VAT already paid during VAT pilot period, i.e., Jan 1, 2012 to Oct 31, 2013 for export services in Shanghai.

CHINA (SHANGHAI) PILOT FREE TRADE ZONE: How does one benefit?

PROGRESS SUMMARY

The launch of the Pilot Free Trade Zone “FTZ” is viewed as a quantum leap offering an opening of the service sector to foreign competition and a comprehensive liberalization of the economy. The plan will offer the qualified foreign investors the following:
  • Free transfer gain out of China
  • Free convertibility of Chinese currency

GUIDANCE ON WHEN STAFF SECONDMENT CREATES TAXABLE PRESENCE IN CHINA

Along with the speedy development of China’s economy and globalization, the need for skilled resources in China is escalating. This has led to an increase in the mobility of human resources to China. Increasingly, multinational companies (“MNCs”) with set up in China are looking for talents within their existing work force from their operations around the world and dispatch them on temporary arrangements to China to assume key technical, management or other positions with the Chinese entity.

FINANCING OPTIONS FOR FOREIGN-INVESTED ENTERPRISES IN CHINA

As China moves from an export-driven economy to a more sustainable consumer-driven economy growth model, it will place greater emphasis on domestic demand to boost consumption, and at the same time, reduce reliance on foreign investments and export. This development is important from the growth perspective of foreign-invested enterprises (“FIEs or Chinese subsidiaries”) in China.

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