Case Studies
Intimate design on shareholding structure, full arrangement of business process and formulate a comprehensive implementation plan, result of reducing 85% corporate tax burden.
Case 1
Client identity
A Hong Kong businessman who has been doing business in China for many years and is very familiar with the business model of Mainland enterprises.
Client request
Client’s business nature is they refer business to mainland manufacturer and collect commissions. During business, mainland manufacturer requires Hong Kong businessman to provide a regulated value-added tax invoice, meanwhile, Hong Kong side hopes to receive a tax-paid income legally.
Analysis of YINGCS Consultant
1. Tax burden shall be very high if Mainland manufacturer pay directly to Hong Kong company. Procedure of remittance and tax payment also is complex and time-consuming, therefore, most of the mainland manufacturers are not willing to cooperate with Hong Kong company since the communication and time cost is expensive.
2. The purpose of client is to transmit their revenue back to Hong Kong. Through establishing a new company in Mainland, and designing company’s equity structure according to the characteristic of client identity; He can solve the money transfer and invoice problem and enjoy the tax incentives at the same time.
3. Further implementation will be how to set up a company in Mainland and enjoy various preferential tax policy. Hence, a complete business process arrangement, appropriate contract terms drafting and trading documents designing will be necessary.
Solution
Client assumed request: How do Hong Kong company issue VAT invoice to Mainland manufacturer
Client actual request: Make use of Hong Kong identity to set up a company in Mainland to solve the invoice and payment issue, and then remit the revenue back to Hong Kong
Corporate advisory service solution
1. Tax Planning
2. Company set-up and schedule planning:
• Planning included but not limited to shareholding structure, business scope, regulation arrangement, all these are foundation that allows customers to collect income legally with lower cost.
• It is covered set-up a company online, open bank account and tax registration etc., allows customers to understand each procedure and have confidence during execution.
3. Contract terms negotiation and consultation: Assist client to negotiate with manufacturer on the payment terms and provide suggestion on the financial risk management in order to achieve tax incentive requirements.
4. Assist client on invoicing, tax declaration, tax payment and revenue remittances back to HK.
Outcome
Client receives payment successfully, depending on the income amount and status, tax reduction is about 50% - 85% or above.
Case 2
Through reasonable arrangement of labor and employment relations for dispatched foreign personnel, timely improvement and handling of legal employment procedures, so as to meet the needs of client to legally dispatch managers from the headquarters to the domestic company for governance, and reduce the personnel and employment risks of clients' domestic companies.
Client identity
A multinational logistic corporation who’s headquarter is in South Korea and entered Chinese market for many years. Its operation subsidiaries are located in medium-large sized cities across China.
Client request
Considering the operation management needs, South China subsidiary has the following requirement:
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South Korea headquarter deploys management and technical staffs to South China subsidiary to serve as the head of company and senior managements.
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Arrange foreign workforce from different levels to join South China subsidiary reasonably and legally.
Analysis of YINGCS Consultant
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When overseas headquarter dispatches foreign workforce to China subsidiary, they must comply the legal requirements of recruiting foreign employees in China. Not only need to ensure foreign employees enter China legally, but also have to ensure employees can apply working visa and residence permit immediately after joining the company. Some foreign employees may need to consider the living, employment and education matter for their accompany family members.
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Since the overseas dispatched employees will supervise many related or unrelated organizations in China, according to the company structure in China and the legal employment relationship between foreigner, client needs to consider some important factors such as which company will the foreigner designated in and the specific employment contract content for foreigner.
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Salary distribution method of foreign employees in China will affect company and employees’ tax payment and their actual income.
Solution
Client assumed request: How to allow foreign employees to work in China subsidiaries reasonably and legally
Client actual request:
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How to allow foreign employees to work in the China subsidiaries reasonably and legally and ensure them to have a high-quality living
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How to plan employment contract content, tax enquiries between company and employees in order to influence both parties’ actual income
Corporate advisory service solution
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Based on the working title and the working duties of dispatched foreign employees, and with the situation of domestic company structure, client can use a form of third-party contractor or self-determined employment method to designate foreigners of different positions to work in China.
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According to client provided salary, position and work content of foreign employees, we shall provide a variety of flexible and reasonable salary composition plan, including different levels of housing and relocation allowance for company leader and other levels’ employees.
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We will assist client to communicate and cooperate with lawyer, provide suggestions in terms of employment contract so as to create a balance employment relationship between client’s company and foreign employees.