Karen Kehl-Rose is the President of the Leading Edge Alliance, an American based professional services network of over 220 professional tax and accounting firms across 106 countries. The LEA member firm combined turnover in 2016 was over US$3 billion, and it is the world’s second largest international accounting association according to the International Accounting Bulletin.
Dezan Shira & Associates are the primary LEA member firm in China. China Briefing discussed American businesses investing in Asia and the role Dezan Shira & Associates have played in introducing China opportunities to the American market with Karen Kehl-Rose.
China Briefing: It is often stated that American manufacturing companies investing outside the US are taking American jobs away. Is this something you see when American businesses invest in places such as Asia or Mexico?
KKR: This is generally a misplaced assumption. The US is moving up the innovation scale, and certain industries are either becoming too costly to keep with American labor, or are being transformed by technologies such as robotics. Auto is a good example. So no, we don’t see many jobs being lost, and if they have been then these are old, outdated technologies and processes we should be moving away from in any event. Instead, China and Asia generally have created wealth for the American economy, not detracted from it, mainly through the provision of affordable consumer products that would otherwise be too costly to manufacture in the US.
China Briefing: Have you seen an upswing in the amount of revenue repatriated from Asia to your member firms’ balance sheets back in the United States? Is the IRS benefiting from American firms and businesses setting up operations or collaborating in Asia?
KKR: Yes. Almost without exception, our member firms have benefited from either establishing Asian desks, partnering with Asian based firms, or having gone and set themselves up in Asia. They will not have done that without seeing the potential and having made that move out of their own locale. Having tasted overseas generated income, they seem to want more. It’s an active progression.
China Briefing: The Leading Edge Alliance is one of the world’s largest accounting networks with member firms around the world. How influential has Dezan Shira & Associates been in introducing opportunities in Asia to them?
KKR: They were one of the first firms that came to the US and talked coherently and clearly about the China opportunity, and then about India and the rest of Asia, and kept on doing so and are still doing that today. They saw opportunities no one else had really grasped, and shared those with us. Dezan Shira are true pioneers. They are very well regarded throughout our network.
China Briefing: What do you see as the main considerations US professional services firms have when seeking to partner with firms in other countries?
KKR: English language is pretty much paramount, both spoken and written. The clarity of procedures and an ability to deliver on time are also important. That can be harder for some Asian firms who aren’t quite as well developed as the US professional services firms tend to be, but there’s been a huge improvement in capabilities.
China Briefing: What do you see as the main barriers to US firms and businesses investing in Asia?
KKR: American businesses can sometimes be rather sedentary and comfortable where they are. So, sometimes, they are a bit slow to come to emerging markets, which is an American malaise in general. The Leading Edge Alliance, with the help of firms such as Dezan Shira, has been successful educating our firms on the opportunities that are available outside of the US.
China Briefing: The global economy is undergoing structural changes, with the movement of potential influence away from the United States. Do you see Asia as a region that American businesses should be fast tracking in terms of getting additional growth and profitability into their US balance sheets?
KKR: The US is going through a period of transition now, but that will pass and settle down. It’s not been the first time there have been political changes in the US, and it won’t be the last, we’re a democracy and sometimes democracies get shaken up a little, it’s how they work sometimes. As for Asia, absolutely our network is very actively involved, and we’re all very excited about the potential. We think it is essential for our member firms to engage in and with Asia.
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Dezan Shira & Associates is a full service practice in China, providing business intelligence, due diligence, legal, tax, IT, HR, payroll, and advisory services throughout the China and Asian region. For assistance with China business issues or investments into China, please contact us at firstname.lastname@example.org or visit us at www.dezshira.com
Dezan Shira & the United States (Complimentary Brochure)
This year, Dezan Shira & Associates turns 25 years old in Asia. We retain extremely strong ties to the United States, employ numerous US nationals throughout Asia, and have serviced several thousand US companies in China and the Asian region at large since 1992. Explore Dezan Shira’s partnership with American investment in China in this brochure.
This Dezan Shira & Associates 2017 China guide provides a comprehensive background and details of all aspects of setting up and operating an American business in China, including due diligence and compliance issues, IP protection, corporate establishment options, calculating tax liabilities, as well as discussing on-going operational issues such as managing bookkeeping, accounts, banking, HR, Payroll, annual license renewals, audit, FCPA compliance and consolidation with US standards and Head Office reporting.
In this issue of China Briefing magazine, we lay out the challenges presented by China’s payroll landscape, including its peculiar Dang An and Hu Kou systems. We then explore how companies of all sizes are leveraging IT-enabled solutions to meet their HR and payroll needs, and why outsourcing payroll is the answer for certain company structures. Finally, we consider the potential for China to emerge as Asia’s premier payroll processing center.