Profit Repatriation Strategies and Tax Optimization in China
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Welcome to ChinaInvest.biz Magazine - November 2011 Issue

ChinaInvest.biz is the editorial division of Klako Group and will be providing insight into investment, tax and operational issues for foreign companies entering and expanding throughout China.

When a company grows to be internatonal, the negative side of running suboptimal profit allocation strategies, among its entities, can be significant. If the comapny intends to reap the full benefit of an international presence, it should accurately, and in a timely manner, plan where to turn a profit.

Form some international businesses, structuring investments into China via Hong Kong can make a lot of sense. Concerns over direct exposure to China liabilities, ease of a future sale of a China investment, and certain tax planning and profit distribution capabilities can make the insertion of a holding company as part of your China strategy an interesting option.

Should you require further information, please contact our Directors at our Group Headquarters and/or China Headquarters.

 

Labor Law is a relatively new phenomenon in China, with the first comprehensive law passed
in 1994. The new law, adopted by the National People’s Congress (NPC) on 29th June 2007,
looked to redress some of the poor working conditions found in China, particularly for the
average worker. Prior to the passage of this law, most Chinese employee’s in small-medium sized
firms lacked employment contracts. Morever, they were short-term, giving employers the flexibility to
frequently bring in a new, often cheaper hires whenever they saw fit.


Profit Repatriation Strategies and Tax Optimization in China


Profit repatriation is a delicate subject under China's foreign direct investment regime. Various regulatory, formality and tax factors surrounding the issue make it worthwhile for investors to define carefully their repatriation strategies, so as to entail tax and profit outcome that they should be legally entitied to. These strategies may not necessarily be complex or costly, while their effects could be substantial: in certain cases meaning a tax saving of up to 15% of the turnover. It is advisable that such mechanisms be written into your China entities articles of associaton and approved by the local government at the application stage. In the article are some commonly used strategies that may help to optimize profit repatriation out of China.

To read the full article, please click here to view the magazine (PDF file)


If you require assistance with the above subject, please contact us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

All information in this report is verified to the best of our ability and is assumed to be correct at time of release; however, Klako Group does not accept responsibility for any losses arising from reliance on the information provided within.

 


Free Consultation with China and Hong Kong Legal & Tax Advisors

The directors of Klako Group will be travelling throughout 2012 to meet with partners and clients and to participate in trade and tax-related events. Should readers or clients of the firm wish to meet our directors face to face during their trips to discuss matters concerning China, Hong Kong and/or Singapore business investments, please contact us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Appointments will be made on a first come, first serve basis. The visits of our directors provides an excellent opportunity to all our readers to discuss first hand their own investment potential, opportunities and legal/tax updated for China, Hong Kong and Singapore in detail.

Please find here the tentative schedule for 2012:

January

Germany
11-14th: Heimtextil Frankfurt
16th: Munich
19th: Duesseldorf
27th: Cologne
28-31st: Paperworld, Frankfurt
29-1st of February: ISPO, Munich

Italy
9-13th: Milano
16th-18th: Torino
19-23rd: Bologna
24-25th: Florence
26-27th: Rome

February

Germany
1st: Hannover
3rd: Cologne
1-6th: Spielwaren Messe, Nuernberg
8-10th: Fruit Logistika, Berlin
10-14th: Ambiente, Frankfurt
15-18th: Biofach, Nuernberg
20-22nd: Hamburg

Belgium
8-10th: Brussels

March

Germany
4-6th: Prowein, Duesseldorf
4-7th: Eisenwarenmesse, Cologne
6-10th: CeBit, Hannover

France
19-22nd: Paris
26-29th: Lyons

United States
10-13th: Housewares Show, Chicago