Set up WFOE in China 2018

Transcription

1 Set up WFOE in China 2018 Latest Composition of Requirements and Relevant Procedures January, 2018 MS Advisory 1421 Consulting Group 1 1 Typ hier de naam van de klant

2 Content 1. Introduction Main Entry Modes for Foreign Investors Advantages Associated with a WFOE Comparison of Entry Modes 5 2. Key Considerations when setting up a WFOE in China Articles of Association Business Scope Registered and Total Investment Company's Organization Chart Registered Address Company's Name Approval Legalization of Shareholder Documents MOFCOM Approval (Five-in-One) Business License Post-Approval Procedures Monthly and Annual Compliance Requirements Transfer Pricing Profit Repatriation Liquidation of a WFOE Conclusion 21 2

3 1. Introduction A Wholly Foreign-Owned Enterprise (WFOE) in China is a Limited Liability Company (LLC) which is established exclusively by the foreign investor s capital ( wholly foreign-owned ). In the early days, the concept of WFOE was established with the aim of boosting manufacturing and exporting activities in China and there existed entry barriers for servicerelated companies. However, once China officially became a part of World Trade Organization in November 2001, tariffs on agreed products were reduced and market access was granted to foreign investments in many industries of which technology and service industry were the most dominant one. As of recent years, for most foreign investors in China a WFOE has become the preferred entry mode to access the Chinese market. The establishment of a WFOE is subject to various laws and regulations in China, even some businesses in certain industries are still prohibited to set up their company in China. To provide a better understanding on what is possible and what is required, we have prepared this extensive white paper to address the most important topics and considerations to take in mind. We will first explain what is a WFOE and what type of companies you can set up compared to other entry modes. Further, we will explain which considerations you should take in mind when setting up this company structure in China Main Entry Modes for Foreign Investors The main forms of business open to foreign investors come in the form of a Wholly Foreign-Owned Enterprise (WFOE), Joint Venture (JV), or a Representative Office (RO); as mentioned earlier, setting up a Wholly Foreign-Owned Enterprise (WFOE) is one of the most used vehicles to enter the Chinese market. In general, there are three different types of WFOEs, which are the following: Standard/Consulting WFOE: Licensed to operate as a consulting business within the 3 service industry.

4 Trading WFOE: Licensed to conduct trading, wholesaling, retailing and franchising activities in China. These types of companies are required to make an additional registration at Customs to be able to import/export goods in/from China. Manufacturing WFOE: Licensed to manufacture products. The process of registering this WFOE is very similar to other WFOE registrations, but as an additional requirement an environmental impact assessment needs to be done before submitting the business license application. A Joint Venture is also a Limited Liability Company and the company structure is subject to same rules and regulations as a WFOE in China. Joint Venture means joint management, which can be difficult to manage for companies without any significant prior international experience. In the Chinese corporate environment, shareholders do not always have a direct influence on the activities of the company, instead the board of directors and above all the legal representative of the company have the authority to make principal decisions. Therefore, in case of a Joint Venture, if you are unaware of the local rules and regulations and are expected to possess a minority stake on the board, it is better to refrain from exercising this entry mode option. Our experience indicates that many JVs have not been successful; this is because the Chinese companies ended up taking full control over the foreign parent company s subsidiary operations and funds in China. Another method to enter Chinese market is via a Representative Office (RO). This is, however, not a separate legal entity. Entering the Chinese market via a Representative Office is not always the most optimal model of entry, since a Representative Office is only allowed to conduct Marketing and Research activities for the overseas head office. Although for RO s, there is no registered capital requirement, but the company is still required to pay Corporate Income Tax based on their expenses (based on tax bureau calculation method). When companies want to engage on real business activities and send invoices to their clients in China, a Representative Office would not be the most effective entry mode to access the Chinese market. 4

5 1.2. Advantages Associated with a WFOE The advantages of a WFOE can generally be summed up as the following: Foreign investors would have 100% control over the equity of the company. Since the WFOE does not have to partner up with a local domestic enterprise, it provides the investors with control/independence related to the matters of HR, managing operations, and devising growth strategies WFOEs are allowed to conduct direct business activities including trading, servicing, and manufacturing activities; provided they are not illegal, prohibited or restricted by the Chinese government and business is within the approved business scope. WFOEs are also allowed to issue fapiao official invoices in RMB and collect their sales revenues in RMB. WFOEs can employ both foreigners and local Chinese directly without having any limitation on the number of foreigners employed. All profits made in China (once certain thresholds are met) can be remitted by WFOEs as a dividend directly back to the investors of the company. To determine the mandatory requirements and the exact amount of dividends which can be remitted, kindly refer to our Profit Repatriation white paper which you can access via our website Comparison of Entry Modes Please find in below table the comparison of the different entry modes in China, thus the WFOE, JV and Representative Office: 5 Item WFOE Joint Venture Representative Office Legal Status Separate legal entity Same as WFOE Not a separate legal entity, but an extension of the foreign HQ that must

6 already existed for at least 2 years Liabilities of Shareholders Limited to the amount of registered capital Limited to the amount of registered capital by both the foreign shareholder and the Chinese shareholder Foreign HQ bears 100% liabilities on all the conducts of an RO Registered Capital No requirement on the minimum amount, however in practice, a sufficient amount is expected by the authorities Same as WFOE No registered capital Business Scope Generally allowed to conduct trading, manufacturing, and servicing as specified in the business scope as far as the activity is not a part of the negative list as issued in the company law catalogue Same as WFOE Limited to (a) Marketing activities for the Head Office, and (b) Liaison and coordination with business contacts for the foreign head office Labor Employment (a) Can hire both foreigners and local Chinese (b) There exists no limitation on hiring process (c) Must have a Legal Representative, Executive Director/Board of Directors, General Same as WFOE (a) Cannot employ more than 4 foreigners (b) Required to appoint one Chief Representative (c) Other foreign employees can only be treated as General Representatives Manager, and the Supervisor (d) Local Chinese can only be employed via FESCO Invoicing and Contracting Allowed to issue invoices (fapiaos) to customers in RMB and under company s own name Same as WFOE Not allowed to issue invoices, sign contracts, and collect revenue from customers 6

7 2. Key Considerations when setting up a WFOE in China 2.1 Articles of Association The Articles of Association (AoA) are a set of rules that are established by the shareholders according to Chinese rules and regulations and the respective company is legally bound to operate within these rules. The AoA is treated as a constitutional document of the WFOE which includes information about the business scope, registered capital, power of the investor(s), rules concerning the board of directors, legal representative and supervisor(s) of the company. It basically governs the internal organization of the WFOE. It is important for companies to analyze and maintain a good record of changes of the Articles of Association and the rules governing this document. Negligence on the end of the enterprises (e.g. failure to comply with registered capital contribution schedules) can have negative consequences for the company, therefore careful considerations must be considered. 2.2 Business Scope The business scope is a brief description which describes generally the industry the company wants to operate in and more specifically the activities it plans to engage upon in China. This description is mentioned on the business license of a company, and is publicly accessible by any individual via the company registry on the website of the Administration of Industry and Commerce (AIC). It is important to note that a company is only allowed to conduct operations which are specified in its business scope. If a company performs activities outside of its business scope, it can be subject to fines from the government, in some cases, even get its business 7

8 license revoked. For instance, if a company registered as a consulting company starts to sell beverages in China, and the Chinese government learns of these business activities, the business license of this consulting company may get revoked. This can be avoided if the company updates its business license prior to engaging in unspecified activities. To determine which activities can be included within the business scope, a Negative List is used, meaning that foreign investments in all sectors should be allowed unless specified as either prohibited or restricted under the negative list. However, Chinese government generally encourages foreign investors to set up businesses in industries which contribute positively toward the economic development of China (i.e. sustainable development). The process of changing the business scope can become complicated and time-consuming. Therefore, we advise our clients to carefully analyze the activities the company wants to engage in before submitting the application to set up the WFOE to the relevant authorities. At this stage, a business scope encompassing a wide range of activities may seem to be a reasonable solution, but beware that this approach might lead to post-licensing problems with the Chinese Tax Bureau. 2.3 Registered and Total Investment In the past, it was required for any WFOE in China to contribute a specified amount of registered capital which had to be injected by the foreign investor in the WFOE within 2 years since the start of company s operations; either as installments or a lump sum, as specified in the Articles of Association. In addition, requirements for the registered capital used to differ between cities and provinces, and for every registered capital contribution a capital verification report had to be provided. Since the latest reforms in the company law of PRC that took effect on 1 st March 2014, WFOEs are no longer required to follow a set of specified registered capital limits but still have to allocate an appropriate amount as registered capital since it is a pre-requisite for businesses to operate in China. This is generally a tax-free contribution which can be paid as either cash (foreign currency or overseas RMB) or contributed in technology, machinery and/or other assets; we would have recommended that it is paid in the foreign currency. 8

9 However, if a low amount is dedicated as registered capital, then companies might still face difficulties in the registration process and this will also limit the bank s commercial interest in working with the company. The appropriate amount still varies depending on the type of industry the WFOE will operate in and the location A WFOE company also need to specify in the Articles of Association what would be the Total Investment to be contributed in the company. The difference between the registered capital and total investment can be brought into China as a loan issued by the parent company. Overseas parent company becomes the creditor of this loan. The cap for this loan is maintained by following ratios (and cannot exceed the ratios): Total Investment Registered Capital Company Loan Less than or equal to US $3 Million At least 70% of total investment A maximum of 30% of total investment US $3 Million - $10 Million At least 50% of total investment A maximum of 50% of total investment US $10 Million - $30 Million At least 40% of total investment A maximum of 60% of total investment For instance, if a total investment of US $2 Million is injected into the WFOE then a minimum of US $1.4 Million is required as a registered capital 9

10 2.4 Company s Organization Chart When setting up a WFOE in China, it is mandatory to determine the following members of the organization: 1. Shareholder 2. Managing Director/ Board of Directors 3. Legal Representative 4. General Manager 5. Supervisor/Board of Supervisors Shareholder A minimum of one shareholder/member is required, and shareholder details are filed with the local Administration for Industry and Commerce (AIC). The shareholders can be of any nationality except Chinese local company ( would either become domestic investment ), and shareholder meetings can take place anywhere Managing Director/Board of Directors WFOE can be managed by either a) a board of directors or b) through a single managing director. The board of directors must be comprised of no fewer than three and no more than thirteen members and full details regarding these individuals must be filed with the Administration for Industry and Commerce. One director among them is appointed as the 10

11 Chairman who also serves as the legal representative and has the right to make agreements on behalf of the WFOE. It is up to the discretion of the investor to decide the management structure. The option of having just one managing director instead of an entire board of directors usually exists if the company operates on a small scale and has few shareholders. The directors can be of any nationality. Corporations cannot be regarded as part of the board of directors, this must be individuals. There is no requirement for board meetings to be held within China Legal Representative A WFOE must appoint a Legal Representative and full details of this individual must be filed with the local Administration for Industry and Commerce. The Legal Representative may be of any nationality and does not have to be a resident of China. The Legal Representative bears complete responsibility of the firm s actions and maintains full authority over the company chops. This means that this person is entitled to engage in any business activity on behalf of the company, but the downside of this position is that in case of discrepancies and issues with the governmental authorities in China, this individual is held responsible. (When the legal representative resides outside of China, the authorities will not be able to hold this individual directly accountable which removes the downside risk for the legal representative) General Manager The day-to-day activities of the WFOE are managed by the General Manager and this position does not have to be registered at the Administration of Industry and Commerce. This person can either be a member of the board or an independent individual. It is not required for this individual to belong to a certain nationality and be a resident of China. Generally, WFOEs appoint a Chinese national as General Manager who does not serve on the board and resides in China. The General Manager has the authority to sign and chop agreements on behalf of the company but usually requires prior approval (via power of attorney) from the Legal Representative. 11

12 2.4.5 Supervisor/Board of Supervisors A supervisor is responsible for supervising the conduct of the board/managing director and to protect the rights of shareholder(s). In practice, the supervisor of a company has no direct authority or responsibility, and usually serves a mere symbolic function within the WFOE company. A WFOE is required by the China Company Law to appoint at least one natural person as the supervisor, and the supervisor can be of any nationality and a resident of any place. The Supervisor cannot be appointed as the General Manager, nor the Legal Representative, since their role is essentially to supervise actions of the GM and Legal Representative. 2.5 Registered Address It is required for a WFOE to have a registered address which must be provided during the registration procedure. Since it is a requirement during the company name registration procedure of the company to explain in which district it will be situated, you should have a lease agreement before submitting the documents for this application. The requirements for the registered address are described below: The office or a plant in case of a manufacturing WFOE should be rented beforehand and a rental agreement of at least 12 months starting from the application submission date to the AIC is required; The registered address should be in a commercial area and the office must not be registered in a residential complex or else the application will be rejected; The registered address should be the same as where the company would conduct its operations; The registered address must be designated solely to the company and must not be shared with any other company. 12

13 Adding a clause in the lease agreement which states the contract is void in case the application is rejected can help escape penalties if the application gets rejected. 2.6 Company s Name Approval Once a registered office address is arranged, the next step in the WFOE registration procedure is to decide an appropriate company s name in Chinese. It is required in China to have a legal Chinese name and this name must follow the following structure: 1) Region or place of incorporation (i.e. Shanghai) 2) Company s Name (i.e. Moore Stephens) 3) Activity that the company will perform (i.e. Management Consulting) 4) Structure of the company (i.e. Company Limited) The official name of any China WFOE must be in Chinese. English names can also be chosen but they serve as an unofficial company name. On the chops, it is mandatory to have the Chinese name of the company mentioned, whereas it is optional to have the English name. Certain special names such as, China, State or International can only be used when specific thresholds of minimum registered capital have been decided. We normally advise our clients to submit at least 5 company names in Chinese. If the first name would be rejected, the second name could be considered by the AIC authority. A general rule is the more Chinese characters you use for your Chinese company name, the more easily your company name will be accepted. 2.7 Legalization of Shareholder Documents In order to receive approval to set up your WFOE in China, the foreign company would have to provide legalized copy of the company documents (from for instance, the Netherlands, United States or Portugal). If the foreign investor is an individual, legalized copy of the passport of the investor need to be provided. These specific documents would normally all need to be translated to Chinese first, notarized by your home country s Ministry of Foreign Affairs and finally legalized by the 13

14 Chinese embassy or Consulate in the respective company. Essentially the sticker China Authentication from the Chinese consulate or embassy is the verification which have value in China. Since apostille system of document verification has not yet (or expected in the future) been implemented in China, therefore no foreign document is valid in Mainland China. It is very important to have the company name identical in all the documents and that the link between the Directors providing the power of attorney/board resolution to the official documents is very clear. The reason behind providing 100% accuracy and a clear linkage is that the officers at Chinese consulate simply look for the individual who has the ultimate authority to sign the documents on company s behalf. If there s a vague link provided and the company name is not consistent among all the documents, it is very likely that the documents will not be accepted. 2.8 MOFCOM Approval As far as the business scope of the company is not in the Negative List for foreign investments, there is a separate application which is required prior to the submission of application for the business license. This application has to go through a simple recordfiling process, which is recently implemented by the Ministry of Commerce (MOFCOM) and would receive the Certificate of Approval as a result. The purpose of this application is for MOFCOM to verify the authenticity and integrity of the information provided. In the past, extensive procedures to test the authenticity of these reports used to be conducted, however since October 2016 reform, these documents are now uploaded through the online integrated management system and is verified only on the provincial level. The reform brings positive changes with regards to China s foreign investment regulatory regime. Approval and administrative licensing at the MOFCOM authority are not automatically required and are increasingly reserved for the most critical or sensitive sectors only. (This reform has modified the WFOE law, the EJV (Equity Joint Venutre) law, the CJV (Cooperative Joint Venture) law and the Taiwanese investment law.) 14

15 2.9 (Five-in-One) Business License After receiving the Certificate of Approval following the record filing at the MOFCOM, you can start to apply for the Business License at the Administration of Industry and Commerce. Prior to October 2015, a Three-in-One business license was used for the registration purposes that integrated three different certificates (i.e. Business License, Organization Code, and Tax Certificate) into one. However, since October 2016, with an aim to simplify the administrative procedures, the Three-in-One business license has been replaced with Five-in-One business license which integrates five different applications into one. This new process requires submission of all the required documents to the AIC and it is the job of AIC to transit these documents to their required departments. This new business license combines (1) the original business license, (2) the organization code certificate, (3) the tax registration certificate, (4) the social security registration certificate, and (5) the statistics registration certificate. The advantage of this Five-in-One business license is as follows: To get a more detailed understanding of the Business License, please refer to the Business License article posted on our website Post-approval procedures Once the business license is obtained, pending on the business scope and the strategy of your company, you would have to complete the following remaining procedures to become an operation company in China. These are: 1. Carving Company Chops, please refer to this article on our website for a detailed overview on company chops. 2. Open RMB and foreign currency capital account i. Registered capital contribution and conversion to RMB 3. Tax Registration i. General VAT Tax Payer Application Procedure ii. VAT software and hardware registration (allowed to issue fapiao) 15

16 4. Registration of companies and employees at Social Secuiry and Housing Fund 5. Registration of company at Foreign Expert Bureau (in order to hire foreign employees) 6. Trading: Import/Export License Registration 7. Other certificates: Depending on the business scope, any other certificates (i.e. Food Circulation Permit etc.) Which steps and which procedures need to be completed once the business license has been obtained, will depend on the business scope of the company Monthly and Annual Compliance Requirements Once business license has been obtained and tax registration has been completed, the company would be required to complete from that date onwards mandatory monthly and annual compliance requirements. Basically, the following standard tax deadlines need to be met: Tax Requirements Filing Deadline CIT For SMEs, mostly on quarterly Quarterly (SMEs) Filing (i.e. Q1 is provisional basis; large enterprises on Jan, Feb, March, Filing April 15) monthly provisional basis After fiscal year ends (always by 31- April-May during the next year Dec), annual CIT filing needs to be (mostly as adjustment on done for previous year. provisional CIT filing) VAT + Small Scale Tax Payer Quarterly Filing Surtax General VAT Tax Payer Monthly Filing IIT Individuals employed or working for entity in China Monthly Filing Normally every month, every company needs to complete the tax filing on the 15 th of the preceding month (i.e. for November tax payment, the tax filing deadline is December 15 th ). This can be different when public holidays take place, and will be notified by the Tax 16

17 Authorities. Corporate Income Tax (CIT: 25%), Value Added Tax (VAT: normal products 17%, services 6% agricultural products and specific goods 11%), Surtax (in between VAT * 6-13%), and Individual Income Tax (depending on salary and can range from 3% to 45%) needs to be filed on a monthly, quarterly and annual basis. VAT taxpayers are divided into VAT General Taxpayers and VAT Small-sized Taxpayers. Taxpayers with annual turnover exceeding the set standards are classified as VAT general taxpayers. Although the tax burden on small scale taxpayers is already very low, tax laws of China allow the general taxpayer to deduct input VAT from output VAT, overall reducing the tax burden on the company. Similarly, general taxpayers have the authority to use fapiaos for general receipts and for tax deduction purposes. It is possible for small scale taxpayers to categorize themselves as a general taxpayer but the process is extremely complex and requires approvals from several departments. Conditions to qualify as a General Tax Payer: Manufacturing industry: the annual turnover standard for taxpayers mainly engaged in manufacturing of goods, processing, and replacement services is 0.5 million RMB. Trading industry: The annual turnover standard for taxpayers engaged in trading, wholesale, and retail of goods is 0.8 million RMB. Consulting industry: The annual turnover standard for taxpayers engaged in service industries is 5 million RMB. Every foreign invested company in China is required to prepare an audit report, complete the Corporate Income Tax Filing and Annual Reporting procedures at MOFCOM, AIC, SAFE etc. Penalties are imposed on corporations that fail to abide the deadline schedule as prescribed by the authorities. For annual audit, the audit reports must be prepared annually by a CPA registered firm in China to ensure company is following China GAAP standards. The WFOEs are required to present their audited financial statements to the State Administration of Taxation (SAT). The deadline for the annual compliance requirements would normally be that the (1) audit report to be completed by February-March during the next fiscal year, (2) the annual corporate income tax filing during March-May in the year and the (3) annual publication report by March June deadline. 17

18 2.12 Transfer Pricing When two companies conduct business with each other the price that they charge to each other for transactions is referred as a transfer price. Every company, having an incentive to report higher profits, tries to reduce the tax payment by switching profits to countries with lower tax rates. Chinese tax authorities, just like any other tax authority in this world, try to prevent companies from engaging in such activities. In recent years, China has significantly increased its domestic rules and regulations governing transfer pricing, following the recommendations of Base Erosion and Profit Shifting (BEPS) action plan by the OECD. All foreign companies engaged in transfer pricing between group entities with China, should therefore take this position well into account. In China, several main considerations regarding transfer pricing which each foreign enterprise must know are as follows: 1. Arm s length principle and TP methods China adheres to the arm s length principle. Arm s length principle means that any commercial transactions between companies, whether they are related or non-related, should not impact the (transfer) price of the goods or services. Meaning that high (profit) margin on commercial transactions between related enterprises must not be shifted to shell holdings (no activities or employees) registered into countries with either no or low Corporate Income Tax rate. 2. Master file and Local file China has implemented these mandatory Transfer Pricing documents with specific thresholds for local and foreign companies active in China. These mandatory reports are called the Master File, which generally serves the purpose as an overview of the entire involved companies Transfer Pricing policies, and the Local File which focuses on the specific intercompany transactions between related companies in other jurisdictions. I. Master File: Companies that either have annual party transactions with a total amount exceeding RMB 1 billion or their ultimate holding company has prepared the Master File, would need to prepare this document in China. 18

19 II. Local File: This document needs to be prepared when transactions exceed 200 million RMB for tangible goods, 100 million RMB for financial assets, 100 million RMB for intangible assets and 40 million RMB for any other type of related party transactions. 3. Transfer Pricing with Chinese Characteristics Though most recommendations from the OECD have been followed by the Chinese tax authorities, they have put on several aspects of their own interpretation and requirements for Transfer Pricing. For instance, within the Local file there is specific requirement for a value chain analysis disclosing profit on the global value chain within the group. Also, specific emphasis is put on the location-specific advantages of China in terms of the company in China. For more information about transfer pricing, please click on the following link to visit our website Profit Repatriation The most common challenge faced by Foreign Invested Enterprises (FIEs) is how to repatriate funds out of China. Since China s policies regarding foreign exchange controls are strictly regulated, repatriating funds becomes a difficult challenge. It is important for firms to prepare a solid repatriation strategy in order to reduce their overall tax burden. In a going concern situation, the most common methods of repatriating funds out of China include (1) Issuing Dividends to the Parent Company, (2) Service Fees, Royalties and Reimbursements, and (3) Outbound Intercompany Loans. When choosing one of these repatriation strategies, it is important to understand (a) the amount of tax that needs to be paid, (b) what the specific requirements of the repatriation strategy are and (c) which procedures to follow. Essentially, the main objective is to maximize the funds received by the Parent Company and to minimize the tax burden. We have prepared detailed analysis of the various methods of profit repatriation, please visit our website to obtain our white paper explaining the different profit repatriation strategies available for WFOEs in China. 19

20 2.14 Liquidation of a WFOE Opening a WFOE can take approximately 4 to 8 months, however closing a company can easily take 1-2 years! Especially de-registration at the Tax Bureau is difficult since the Tax Bureau is usually non-cooperative since they lose tax revenue. It is therefore important to take this procedure in mind before setting up a WFOE in China. Basically the liquidation procedure follows three steps: Applying for termination with the government authority that gave the original approval. (This is usually the Ministry of Commerce, however if business activities were a part of negative list then other departments need to be dealt with first) Carrying out the liquidation De-Register at AIC, Tax Bureau and other relevant authorities The liquidated company ceases to exist and is required to (a) pay off all of its debts, (b) deregister at all relevant government authorities and (c) close its bank accounts in China. After the above debt has been discharged, the company can distribute the remaining funds back to the shareholders. This needs to be converted to either USD or EUR and can be freely distributed back to the shareholder via foreign exchange bank account. 20

21 3. Conclusion As you can read from the above, there are many considerations you should take into account when setting up a WFOE in China. It is important to have a good understanding to avoid to make any unnecessary changes in the future and have to company ready and suitable to engage on any business activity you seek to pursue in China. At Moore Stephens Consulting China we have advised many companies on how to enter the Chinese market and structure their investments. This has enabled companies to be well prepared for the Chinese market and well equipped in doing business in China. If you are considering to enter the Chinese market, and need any advice on where, how and what do when starting up a business in China, please do not hesitate to contact us at info@msadvisory.com. We would be delighted to schedule a call or have a coffee together to go through your plans for the Chinese market. ************************************************************* We have prepared the WFOE white paper in cooperation with 1421 Consulting Group Consulting Group is specialized in supporting Western companies setting up and growing their businesses in China. Via their one-stop service model, they are able to balance the initial investment needed to discover opportunities and open the Chinese market with expected returns of investment uses their strong knowledge and network for assisting companies in China. The combination of western colleagues with vast experience in China, and Chinese colleagues with strong understanding of the western needs and desires makes them able to assist their clients in the best possible manner Consulting Group is based in Beijing and in Shenzhen. For any inquiries within these areas, we would be happy to make the introduction. 21