Common Mistakes & Misperceptions When Investing In China - And How to Avoid Them

July / August 2006 China Briefing

In this issue we deal with the various structural issues that affect your manufacturing or service business in China, and how to maximize your return on investment by paying attention to detail in tax structuring, legal structuring issues, calculating registered capital amounts, VAT rebates and profits repatriation matters. We highlight common problems and mistakes made when processing approvals applications, how to avoid these and how to get the most from your China investment. It includes the following articles:

"Faulty & Inefficient China Business Applications"

By Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates.

This extensive and detailed piece covers common mistakes and problems that occur in China when investors are not sufficiently aware of Chinas foreign investment law, and what can be done to mitigate against these issues. The article explores issues affecting China Representative Offices, Foreign Invested Commercial Enterprises, Wholly Foreign Owned Enterprises as well as Joint Ventures, and examines subjects such as the dangers of undercapitalization, misunderstanding the complete financing aspects of registered capital, the variety of tax treatments that need to be considered when investing in China and the situations that affect these. In addition it examines IP problems, mergers & acquisitions in China, considerations when hiring Chinese staff, and other China operational pitfalls to be aware of.