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RMB Liberalization and the Offshoring – Friends or Foes?

By Claire van den Heever Since its establishment in September 2013, Shanghai’sFree Trade Zone (FTZ) has been making international headlines as businesses and investors flock to take advantage of a highly appealing set of loosened restrictions that are facilitating the creation of an entirely new financial ecosystem. Among the most significant benefits of the FTZ is making company formation immeasurably easier for investors – both local and foreign. Schemes such as cross-border lending and cash pooling – which have helped facilitate yuan circulation and usage in the offshore market – are also being allowed.The Zone’s establishment is seen as actively enabling...
中文

Rising to New Challenges

By Frances Emery  “Offshore” is a word for which there are, perhaps, as many varied connotations as there arejurisdictions in the world that consider themselves “offshore financial centers”. And, in the same way that it isn’t as easy as it once was to define exactly what constitutes an “offshore financial center”, the concept of “offshore” itself has changed vastly, and continues to do so at a rapid pace. One thing that economists and industry experts agree on today is that there is no hard and fast definition for “offshore”. Certainly, most offshore jurisdictions have separate legal systemsthrough which non-resident companies...
中文

The Advantage of a Trust Owning Your Property

By Sovereign. Most people prefer not to think about what will happen to their property on death. However, failure to make proper plans can create real problems and cause great expense (including tax liabilities) for next of kin, problems that they will be forced to sort out at a time when they are emotionally upset and most vulnerable. Making a will is a sensible way for an individual to put his or her affairs in order. However, the administration of a deceased’s estate can be costly (often around 4% of the total value of the estate), result in long delays...
中文

Trust and Foundation: Structuring for Wealthy Chinese

By Leo Zhang Although China's economy is experiencing a slowdown amid global economic uncertainties, the number of Chinese super-wealthy is still gradually increasing, making financial and asset planning an inevitable issue they have to face in the coming years. Nowadays more and more Chinese rich families are looking overseas for financial solutions and many of them have started to adopt western-style tools such as trusts and foundations in taxation and succession considerations. The trend is gaining popular as the younger generation began to take rein of their family businesses. By the end of last year, there were 2.8 million millionaires...
中文

A Know-how Guide to Forming an Offshore Company

By Courtesy of Global Incorporation Guide As modern telecom-munications continue to make the Earth feel smaller and smaller, forming a company in a foreign jurisdiction half way across the world is perhaps as easy as it ever been, and recent figures suggest that offshore incorporation activity is returning to pre-recession levels thanks to rising investor confidence. In this feature we look at the basics of incorporating a company offshore. Introduction The word ffshore has almost become synonymous with tax avoidance in the minds of the general public in the past few years. But this is largely due to vote-seeking politicians...

Establishing a Company in the Shanghai FTZ

By Yao Lu Since first opening in September 2013, investors and businesses have flocked to the Shanghai FTZ. According to local media reports, more than 4,600 new companies, including 280 foreign-invested enterprises (FIEs), were established in the Zone as of January 14, 2014. This surge can be attributed to the Zone relaxed requirements and streamlined approval procedures for company establishment, which we will further describe below. Relaxed Incorporation Requirements The Zone cancels out the minimum registration capital of RMB30,000 for limited liability companies, the RMB100,000 minimum for single shareholder companies, and the RMB5 million minimum for joint stock companies. Moreover,...

What Chinese Citizens and Businesses Should Know About the IRS

By Robert W. Wood Many Chinese individuals and companies conduct business with the U.S., have U.S. investments, or U.S. relatives. Some encounter the Internal Revenue Service (IRS) because of U.S. withholding tax rules. Others find themselves answering IRS questions because of the increasing cooperation between the U.S. and foreign governments including China. However, many individuals and families in China are either U.S. citizens or permanent residents, even if they do not spend significant time in the U.S. That means their U.S. tax compliance may languish. This is a dangerous tendency, particularly at a time when the U.S. is enforcing its...

China Relationship with the Contentious U.S. FATCA

By Asia Briefing For several years now, the United States has been preparing legislation under the Foreign Account Tax Compliance Act (FATCA), a complex reporting and withholding regime intended to enable the U.S. to better access offshore accounts, investments and income of U.S. citizens who have failed to rigorously report these holdings. Despite several nations embrace of the FATCA, China has continued to delay negotiations with the U.S. Treasury over whether or not to allow Chinese financial institutions to report U.S. taxpayer or U.S. firm information to the United States Government. Under the FATCA, participating foreign financial institutions would be...