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.

HOW TO AVOID PROFITS FROM BEING STUCK IN CHINA FOR MULTINATIONALS

Setting up operations in China is challenging for foreign firms. Indeed several barriers prevent multinationals to repatriate some of the profits linked to their profitable operations in China, such as:

Since the Chinese economy is still developing, the regulation system is very strict. It is therefore important to manage correctly registration and approval procedures. Incorrect management can lead to the cancellation of remittance by making it illegal. Several strategies can be implemented to avoid this.

The Shanghai Pilot Free Trade Zone

The Shanghai Pilot Free Trade Zone was established in 2013 to enhance China’s economic reform by liberalizing the RMB. It is intended to boost trade and meet international standards in terms of taxation thereby loosening restrictions on foreign investment in China. Mr Ai Baojun, Shanghai’s Vice Mayor was appointed head of the zone. It went through several stages before being officially approved by the State Council.

Startups in HK: how to succeed in a complex environment

Despite an attractive legal and financial structure, HK is a difficult place for startups. Indeed, startups aren’t part of the cultural mindset there; neither the government nor the workforce pays much attention to their economic potential. Only 1% of the HK GDP was used to invest in R&D this year. 

Several difficulties arise for entrepreneurs in HK

An overview of the VAT Reform

The Value-Added Tax (VAT) has been carefully introduced in China since 2012, starting in Shanghai and spreading in the whole country. After 2 years and more than 500 regulation changes, the VAT reform is about to enter its very last phase, seeing the total removal of the Business Tax (BT). Understanding how the VAT works has, therefore, never been so important, as this tax bears both high risks and opportunities.

Current state of the reforms

Joint-Ventures in China: How to make your partnership successful

Following China opening up reforms in the 90s, investors from all over the world have rushed in the country to get a piece of cake: the market was extremely promising, with a large and totally untapped consumer base. However, laws and regulations were still very obscure and local tastes and preferences rather unknown for westerners. Considered as a convenient and cheap way to enter the Chinese market – and also because government often required foreigners to do so – foreign investors established Joint-Ventures with local partners.

WFOE set-up in the Shanghai Pilot Free Trade Zone

Wholly Foreign-Owned Enterprise (WFOE) is, by far, the favorite entity for foreign investors looking to set up a company in China. Representative Offices may offer cheap and easy way to feel Chinese trends, Joint-Ventures may give you a privileged access to the market, but WFOE are the only way for a foreign investor to have full control on its operations in China. And where else than in Shanghai would you set up a WFOE? Since the launch of the Shanghai Pilot Free Trade Zone (SHPFTZ) last September, new opportunities for foreign investors are arising in the city.

Representative Office Incorporation in China

Representative Offices (RO) are the cheapest, fastest and easiest way to incorporate in China, compared to WFOE and JV. However, such advantages come with several weak points you should be aware of before choosing to set up an RO. Let’s have a closer look at their characteristics:

Investing in China: Be careful about the Variable Interests Entities

About a half of Chinese companies listed in NYSE and NASDAQ are using Variable Interests Entities so as to avoid the restrictions over foreign investments. While they are a very good way for foreigners to benefit from Chinese companies’ rapid growth, major risks loom, threatening foreign investors’ ability to exercise their shareholding rights on the Chinese company. In this article, S.J.Grand offers you an overview of the VIE’s advantages and drawbacks.

Accounting Fraud Detection in China

Performing an accurate and efficient accounting in China can be an acrobatic exercise. On the one hand, you have the Chinese standards introduced by GAAP, which companies can understand in different ways. On the other hand, you have local traditional practices, which habits may not be very transparent-friendly. Thing is, frauds are harmful for the company at many different levels, among which its finances, strategic decisions and marketing.

Interpretation of the SHIAC Pilot Free Trade Zone Arbitration Rules

Just recently, on 1st May 2014 the China (Shanghai) Pilot Free Trade Zone Arbitration Rules came into effect. Formulated by the newly structured Shanghai International Arbitration Center (SHIAC) the regulations consist of 10 chapters and 85 articles. In line with international developments, the framework shall provide an alternative way for contractual and property rights dispute resolution in contrast to enduring court proceedings.

MANAGING WORKING CAPITAL IN CHINA

With a financial market growing rapidly, ensuring strong working capital management has become a target for operational returns and shareholder value in China. Our focus is on managing working capital in China.

Although, most Chinese firms are financially constrained and still have limited access to long-term debt and financing solutions, the recent reforms have lead the development of new credit lines. The growing development of “trust loans” is a concrete example.

How to avoid the Cash Trap?

Strategies to repatriating profit from China in 2014

2020 Chinese Automotive Market Perspectives

China’s new car sales have been growing at a two-digit rate for the past decade, reaching 19.9 million vehicles purchased last year. However, due to more and more constraints – market maturation, fierce competition and local restrictions over car sales – its growth rate is unlikely to exceed 10% per year during the next decade. How should OEMs adapt?

  • Differentiate your products

It will ease the competition and enable you to increase your profit margins.

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