Corporate governance in China need special attention and strong technical advice. This is the necessary infrastructure doing business in China

Below are some of the corporate governance considerations doing business in China:

Legal Structure & Tax Implication

• Should your China business need to have permanent establishment in China?
• What is the holding company structure? Do we need offshore companies for tax planning and listing purpose?
• Should a foreign enterprise operate as a China representative office or China WFOE?
• What are the tax implications of different China legal structure?

• Do your office / lease contract / payment receipts comply with the local China regulations?
• Does your office comply with basic safety & security measures to safeguard company assets, confidential information and intellectual property?
• Does your company employ licensed agent to locate office facilities and agent fee properly supported by proper tax receipt?

• Does your company managed by a single person (not familiar with China tax and economic laws) to perform procurement / approval / payment / record keeping / banking? Are there inadequate segregation of duties and internal control to safeguard company assets?
• Does your company have someone to look after tax / compliance / cash flow forecast / chops management / record retention / procurement?
• Does the person holding company chops understand legal / tax implications on applying chops? What should be the chop process? How to distinguish the relevant chops (company chop, contract chop, finance chop and HR chop) to apply on different document? Should the holding company, WFOE or Rep office chop be applied?
• Are the chop holders knowledgeable and reliable on committing company’s liabilities? What is the chop usage approval process? What are the backup plans in the absence of chop holders?

• What is the right balance to employ an cost effective consultant but still deliver quality service? What is the qualification process? Who should be involved in the qualification process?
• What is the balance between the technical competency and relationship in China? How important is cost consideration and mutual trust?
• What are the considerations on employing quasi-government bodies on staff payroll, insurance and individual income tax calculation / filing; and, office security?

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