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Step one: To Set Up a HK Company

1.Introduction of HK Company set up:

Hong Kong has become the world’s eighth largest trading economy calculated in terms of total value of trade undertaken.

Hong Kong is the seventh biggest importer of goods and the ninth biggest exporter. This is an astonishing achievement for a territory with a population of only 6 million.

2.Advantages:

Only Hong Kong source income is subject to Hong Kong tax. For this reason Hong Kong is a suitable base from which to administer an offshore company without tax consequence provided that company does not do business with other Hong Kong companies. A Hong Kong company does not have to state its registered office address or place of incorporation on its (more…)

By Vincent Cheung from www.pathtochina.com 
China wine Market Analysis

 According to the “Wine in China: A Market Analysis 2006”, total production of wine grew by 114.98% between 200 and 2006, to reach a total industry volume of over 500 million litres  and total consumption of wine grew by 108% between 2000 and 2006 to reach a total market volume of 575 millions litres. We witness a dramatic increase in grape wine consumption in the past 7 years. If the statistic doesn’t make real sense to you, be ware of that:  the total production of spirit is 3.5 billion litres , roughly 7 times of wine production of 2006 ; and the annual production of beer in China is more than 35 billion litres, (more…)

Translated by Vincent Cheung from www.pathtochina.com , 

check out the Chinese version  

The latest 《White Paper on Environment for Foreign Investment in Shanghai》 issued last month selects the Top 10 foreign-invested companies of Shanghai on the basis of investment scale。

 These Top 10 Companies are： GE, Sumitomo, Hitachi, Itochu, Mitsubishi, Mitsui Fudosan, Siemens, Fuji Film, Marubeni, VW.The top 10 companies have made a total investment of 4.828 Billion dollars in 561 projects, accounting for more than 30% of the fortune 500 companies’ total investment projects in Shanghai, i.e. 21% of fortune 500 companies’ total investment capital in Shanghai.

Till the end of 2006, there have been 257 “Fortune 500” companies that invest in Shanghai, with an accumulative 1884 investment projects, including 1537 projects undertaken by manufacturing or trading companies, accounting for 82% of the (more…)

 From www.fdi.gov.cnArticle 1 These provisions are formulated hereby pursuant to the Company Law of the People’s Republic of China, the Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Chinese-Foreign Contractual Joint Ventures, the Law of the People’s Republic on Foreign-capital Enterprises and other pertinent laws and regulations to promote the healthy development of enterprises with foreign investment, protect the legitimate rights and interests of investors, and maintain social and economic order.

Article 2 “Alteration of investors” equities in enterprises with foreign investment as used in these Provisions refers to alteration of investors of Sino-foreign equity joint ventures, Chinese-foreign contractual joint ventures, enterprises with foreign investment set up on the territory of the People’s Republic of China (hereinafter referred to as the enterprise) or their shares (hereinafter referred to as equities) of investment in the enterprise (including terms of cooperation they provide). It will include, but will not limit to, the following major factors leading to alteration of investors’s equities in enterprises with foreign investment: (more…)

By Vincent Cheung

Aiming to find a balance between encouraging foreign investment and improving workers’ life quality to tackle the country’s serious side effects of the enormous economic growth. NPC Law Committee, enacted the long-awaited new China Labour Contract Law on June 29, offering a magnificent increase in the protection of the employee’s rights and entitling bigger power to the all-China Federation of Trade Unions (ACFTU). The law caused a growing concern about the potential less favorable investment environment in china. The US-China Business Council warned that the Draft Law may reduce employment opportunities for Chinese workers and negatively impact China’s competitiveness and appeal as a destination for foreign investment.”

Some companies had expressed concern that the new law is likely to increase wage costs, give unions too much influence and control over company rules and make it more difficult to dismiss employees for unqualified performance. After the first draft was approved in March 2006, Wal-Mart, Google, General Electric and other multinational corporations were  aggressively lobbying to restrict new rights for Chinese employees and some of the companies even threated to leave China for countries like Pakistan and Thailand if the law finally came into force. Chinese government will never risk the country losing her attractiveness for foreign investors. There are four reasons why the new labour contract law won’t have serious negative impact on

1.      Poor Enforcement  

The impact of the law lies in the government’s wiliness and ability to enforce it. Chinese people seem to be too flexible to be in full compliance with any rules. In some sectors, Chinese’s laws are even more rigorous than the laws of developed countries, but enforcement is the real problem.  With much probability, there will be a watered-down version of the new labor contract law when it comes to Local governments, who are much keen on attracting foreign investment and therefore has huge tolerance for foreign investors. Some officials of local governments dare to sacrifice everything for GDP growth.  We shouldn’t neglect that, in china, where independent worker’s union is illegal, (more…)