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Yearly Archives: 2013 ...
Developed nations continue to drag down businesses with higher corporation taxes than BRICs
Some developed nations are still dragging their economies down with far higher corporation tax rates than emerging economies, according to research by UHY, the international accounting and consultancy network.
On taxable profits of USD 1,000,000, the G7* group of developed economies takes an average of 32.6% of corporate profits in tax, compared to an average of 30.3% in the BRIC** economies.
UHY says that comparatively high corporation tax rates put businesses in developed economies at a serious disadvantage compared to those based in emerging markets, and risk suppressing economic growth in developed economies.
Ladislav Hornan, Chairman of UHY, says: “Corporation taxes are a significant burden for businesses, and that burden is far higher in developed economies than in emerging markets. High corporation taxes mean businesses in developed economies cannot compete on a level playing field, suppressing growth in economies that are already struggling.”
“The low corporation tax rates in emerging markets or lower-tax economies mean businesses can plough much more of their profits back into business or product development. More investment and lower costs can give businesses in places like China a competitive advantage on price and product quality when it comes to exporting to developed economies or competing with imports.”
Ladislav Hornan adds: “The benefits of being based in a developed economy – better infrastructure and well-established supply chains – count for less and less as emerging economies improve their infrastructure, tax systems, and business communities.”
“As emerging economies catch up to developed economies, the disadvantages of developed economies – more red tape and higher taxes – increasingly stand out. Without action on the kinds of things that suppress growth, such as overly complex regulation or high taxes, businesses based in developed economies will begin to look closely at relocating.”
UHY tax professionals studied tax data in 26 countries across its international network, including all members of the G7, as well as key emerging economies. UHY calculated the corporation taxes due on taxable profits of USD100,000 and USD1,000,000
UHY says that, of the countries included in the study, Japan charges the highest taxes on corporate profits of USD 100,000 (43%). The UAE charges no tax on corporate profits, while the Irish government takes just 12.5% of corporate profits in tax.
The average global tax on profits of USD 100,000 is 25.6%, while the BRIC average is 27.8%, and the G7 average is 30.2%.
Ladislav Hornan says: “There are some emerging economies with high corporation taxes, such as India. However, these countries support their businesses in other ways. India, for example, has exceptionally low taxes on employment.”
“Outside of the BRICs, corporation taxes in emerging markets such as eastern European countries or in Malaysia are much lower than average.”
UHY adds that some G7 countries have taken steps to reduce their corporation tax rate.
Ladislav Hornan says: “Japan, Canada, and the UK have all recognised the importance of cutting the headline corporation tax rate, with each country cutting their rate in the last year – although Japan still has the highest corporation tax rate in the G7.”
“Cutting the headline corporation tax rate rather than trying to boost competitiveness through introducing new reliefs has several advantages for both business and government.”
Ladislav Hornan explains: “Introducing new tax reliefs will benefit some businesses, but they introduce added complexity to the tax system. This creates new burdens for businesses as they work out which reliefs they can and can’t qualify for, and it creates scope for disputes with tax authorities.”
“Businesses will base their decision on where to have their tax base on a range of factors, but cuts in the headline corporate tax rate can send a strong, clear signal to businesses that a government is ‘business-friendly’.”
Recent UHY studies have found G7 countries lagging behind BRIC countries on a range of business and tax burdens.
One UHY study in 2012 found that G7 countries took an average of 29.7% of their GDP in tax, while BRIC countries took an average of 27.7%.
An earlier 2013 study on employment taxes found that G7 employers paid an average added 23.8% of an employee’s USD 75,000 salary in social security contributions, compared to 22% for an employer in a BRIC economy.
Roisin Duffy, Tax Director at UHY Farrelly Dawe White Limited in Ireland, a member firm of UHY, says: “Despite the difficult financial situation the government is in, it has fought hard to maintain a very low headline rate of corporation tax. This is a major factor in helping attract and keep major global companies like Google and Facebook in Ireland.”
Andrea D’Amico of FiderConsult Srl, member firm of UHY in Italy, says: “Italian businesses are struggling under a high tax and regulatory burden. Whether it is employment taxes, taxes on profits, or bureaucracy, Italy does not compare well to either developed or developing economies. While the Italian corporate tax rate is around 30% in theory, companies may end up paying far higher taxes because of the way the tax system works. It’s important that the Government take urgent measures to address this. Cutting the headline corporate tax rate would be a step in the right direction.”
Rajiv Saxena, Managing Partner at UHY, a partnership in UAE and member of UHY, says: “Businesses in the UAE benefit from a very generous tax regime. Business activities attract very little, or, more often than not, no tax charge. The low costs of doing business have helped turn the UAE into a major global business hub.”
Value of tax charged on taxable corporate profits of $100,000 and $1,000,000 in 2012-13
UHY strengthens presence in Eurasia
Global accountancy network UHY extends its coverage within the EMEA region by appointing ARG Group LLC.
ARG Group LLC was established in 2008 and has grown into one of Georgia’s leading audit and business consulting firms. With a team of 62 staff including 5 partners, the firm’s head office is based in Tbilisi. The firm provides a full suite of services including commercial legal services and IT consultancy to a portfolio of clients in a variety of sectors such as construction, manufacturing, trade/industry, services and finance.
ARG Group’s managing partner, Akaki Zhamutashvili says: “We have joined the UHY network for a number of reasons. Our firm’s affiliation to the UHY network underpins our commitment to deliver quality services for our clients. Being a member of UHY will strengthen our local capabilities, which will give our current and prospective clients access to leading audit, accountancy and business advisors anywhere in the world. ”
Ladislav Hornan, chairman of UHY commented: “We are delighted ARG Group LLC has joined the UHY network extending our coverage and capabilities in the Eurasia region, especially with Georgia’s strategic location between Europe and Asia and its developing role as a transit point for gas, oil, and other goods. ARG Group LLC‘s admittance to the UHY network will bring strong regional market and sector expertise, enhancing our capabilities in this region. We strongly believe the firm is a very good fit for our network.”
Languages spoken in the firm are Georgian, English, Russian and Turkish.
Doing Business in Lebanon
Employers now pay average employment costs worth nearly 25% of employees’ salaries
The average extra cost, across the world, to businesses in social security and other “taxes” of employing a worker is now almost 23% of an employee’s salary*, according to research by UHY, the international accounting and consultancy network.
UHY tax professionals studied data in 25 countries across its international network, including all members of the G7 and the emerging BRIC economies. UHY calculated the value of payments a company had to make, such as social security contributions, on top of the gross salary they pay to individual employees (see tables below).
UHY says that the average employer will have to pay out an extra USD 6,757 on top of a gross salary of USD 30,000 in various employment costs (22.5% of gross salary), from mandatory pension provisions to healthcare cover. For a gross salary of USD 300,000 the average employer has to pay an extra USD 41,206, 13.7% of the gross salary.
Ladislav Hornan, Chairman of UHY, says: “Governments in many countries have heaped on extra employment costs over the past decade or so. In countries with precarious financial positions and unemployment problems, high employment costs are now undermining the job creation agenda.”
“Lower employment costs can help labour market flexibility and new business creation, which can be vital in periods of economic difficulty.”
Ladislav Hornan adds: “Many of the social security structures that exist today were put in place decades ago, and the principles behind them haven’t been touched for decades. Some would argue, employment costs have been allowed to grow unchecked as a result.”
“The countries with the consistently lowest employment costs are places like the US, Denmark, India, and Canada.”
UHY adds that seven of the ten countries with the highest employment costs for low or middle income workers are European. An average European employer must pay an extra USD 17,860 (23.8% of gross salary) on salaries of USD 75,000 – American employers have to pay an extra USD 6,182 (8.2%) and Chinese employers have to pay an extra USD 9,263 (12.4%).
Ladislav Hornan says: “Now that parts of the world – particularly Europe – are struggling economically and have increasingly elderly populations and fewer workers contributing to the social security system, existing social security structures could become even more of a burden for businesses.”
“We have the terrible situation where high employment costs may actually prolong the European unemployment crisis. Businesses in some European countries will be unwilling to take on new workers knowing that the salary they pay the worker is actually just a fraction of what that worker will actually cost.”
Ladislav Hornan adds “Europe might have comparatively low employment costs for very high earners, but this won’t help businesses that can’t afford to hire the huge number of unemployed graduates or young people looking for their first job.”
UHY says that average G7 employers have to pay an extra USD 7,263 (24.2%) on top of a gross salary of USD 30,000, and an extra USD 61,063 (20.4%) on top of salaries of USD 300,000. For average employers in BRIC countries, the respective employment costs are USD 8,488 (28.3%) and USD 56,565 (18.9%).
UHY adds that there is a huge disparity between countries with the highest employment costs and those with the lowest. Employment costs for gross salaries of USD 30,000 are 16 times higher in the countries with the heaviest burden than they are in countries with the cheapest employment costs.
For salaries of USD 300,000, employment costs in the most expensive country – Brazil – are 40 times higher than those in the cheapest country – Denmark. Brazilian employers must pay an extra USD 172,667 on top of a gross salary of USD 300,000 (57.6% of gross salary), while Danish employers must pay an extra USD 4,332 (1.4%).
Ladislav Hornan says: “While the most expensive countries are typically European, Brazil actually has the heaviest employment costs in the study. Brazil has consistently high employment costs for employees at all salary levels, with employers having to regularly pay out over 50% of an employee’s salary in extra costs.”
“Brazil has sacrificed low employment costs for low personal taxes or indirect taxes. This might be a boost for the consumer economy, but this balance could hurt the new business and job creation that is needed to keep economic growth sustainable.”
UHY adds that there are also significant disparities between employment costs within Europe.
Employers in Italy – the European country with the highest employment costs – have to pay an extra USD 15,544 in social security costs on top of a salary of USD 30,000 (55% of gross salary). In Denmark, employers have to pay an extra USD 1,632 – just 5.4% of the gross salary.
Ladislav Hornan says: “Countries like the UK, Germany, Ireland, or Denmark have an advantage in that their employment costs are far lower than those elsewhere in the Single Market. It’s much cheaper to start a new business and take on new workers than it is anywhere else in Europe.”
Eric Waidergorn, Director of UHY Moreira and member of UHY in Brazil, says: “Brazil’s employment costs are exceptionally high, which will hold back new business development and job creation and could encourage informal employment arrangements. While direct personal taxes are low, compared to developed countries and BRICs, high employment costs are a significant hurdle to Brazil’s economic development.”
Martin Cairns of McGovern, Hurley, Cunningham, LLP and member of UHY in Canada, says: “Unlike other countries, Canada has managed to keep its mandatory employment costs relatively low as a percentage of salaries over the past couple of years, leaving Canadian businesses with some of the lowest mandatory employment costs in the world. This will have contributed to Canadian businesses’ ability to cope with the dip in international trade that followed the financial crisis.”
Payments made by businesses on top of gross salaries by USD and payments as % of gross salary
*Based on a gross annual salary of USD 30,000
†Figure may vary slightly depending on state
Doing Business in Czech Republic
Doing Business in United States
Doing Business in Portugal
Brazil and India hit businesses with highest sales and consumption taxes
Brazil and India hit consumers with the highest levels of consumption and sales taxes in the world, according to new research by UHY, the international accounting and consultancy network.
UHY adds that behind India and Brazil, European countries impose the heaviest sales tax burden, which threatens to undermine recoveries in consumer spending by putting pressure on disposable incomes.
UHY tax professionals studied data from 22 countries* across its international network, including all members of the G8 and the developing BRIC economies. UHY calculated the percentage of the total price of a representative basket of goods and services that was made up of taxes and duties.
The Brazilian and Indian governments take 28.7% and 38% respectively of the total price of the basket of goods and services through taxes. On average, European governments are responsible for 15.5% of the price of UHY’s basket of goods and services.
This compares to an average of 13.8% for all countries, an average of 8.2% in the Asia-Pacific countries, 12.3% in G8 countries.
Ladislav Hornan, chairman of UHY, says: “Brazil and India, like many developing economies, rely far more on sales taxes than income taxes compared to their more economically developed counterparts. Lower income taxes can have a positive effect on productivity, as it encourages individuals to work harder and entrepreneurs to generate more wealth.
“However, questions remain as to whether these high consumption taxes have hindered the growth of vibrant consumer element of those economies.”
UK and Europe struggle with high direct and indirect taxes
UHY says that while some developing economies balance high sales taxes with low income taxes, the UK and European governments levy some of the highest sales and income taxes in the world.
Ladislav Hornan says: “European economies have ‘zig-zagged’ over the past few years, limping into growth and slumping back into decline. Struggling with huge budget deficits, European governments have raised income and sales taxes. This has severely discouraged the consumer spending that could support a stronger recovery.
“Comparing the sales taxes in the US and Europe, it is clear where consumers have a better deal.”
The UK, the Netherlands, and France have all increased their sales taxes recently – the UK raised VAT from 15% to 20% with two changes in the space of just two years. France plans further rises in 2013.
UHY adds that taxes on ‘necessity’ purchases in Europe are exceptionally high. There are six countries in the study where over 50% of the price of a litre of petrol is made up of taxes: Ireland (60.5%); France (59.1%); Germany (58.5%); Italy (57.8%); the UK (58%); and the Netherlands (50.2%).
Ladislav Hornan says: “European countries’ high indirect taxes have a particularly heavy impact on low earners. Necessary costs, like petrol or household energy bills, form a significant proportion of small, fixed incomes. The benefits of progressive income taxes are lost with high sales taxes.
Six of the ten countries with the highest taxes on household energy bills were European countries, with an average of 19% of energy bills in these countries being made up of tax.
UHY warns that excessive levels of indirect taxes can penalise businesses that may be struggling to compete in an increasingly international marketplace.
Ladislav Hornan says: “High sales and consumption taxes put a lot of pressure on businesses’ bottom lines. In order to compete on price and to keep customers shopping, some businesses may opt to absorb sales taxes, especially if they are raised significantly or repeatedly.
“With the rising dominance of e-commerce, especially in retail, many businesses will find their competitors are now based overseas in countries with lower sales taxes. This makes absorbing domestic tax rises all the more important, and has been a notable problem in the EU.”
UHY adds that the study shows that some countries’ tax systems have struggled to catch up with the rise of e-commerce.
In several countries, including India, Malaysia, Israel, the US, and Italy, sales taxes were levied on physical CDs but not on the mp3 versions of the same albums.
Ladislav Hornan adds: “New technologies and globalisation have caused plenty of problems for unwieldy and complex tax systems. Tax systems can be very slow to react to the rise of new ways of doing business, and can leave traditional businesses – like physical stores – at a disadvantage.”
The Malaysian government levied one of the lowest levels of indirect taxes in the study and was only responsible for 3.9% of the total cost of the basket.
Seri Sofia Irmawati, head of tax at UHY Tax Advisory (Malaysia) and member of UHY, says: “Malaysia operates a range of consumption taxes, but these are only charged on relatively few goods. They are either used as ‘sin’ taxes on products such as alcohol or cigarettes, or import taxes on expensive goods.
“Malaysia’s low level of indirect taxes is a boost for the consumer economy. Low consumption taxes provide businesses with plenty of flexibility on price and help keep goods affordable for Malaysian consumers.”
At the other end of the scale, Brazil’s indirect taxes were some of the highest in the study. Brazil’s government was responsible for 28.7% of the cost of the basket.
Diego Moreira, executive director of UHY Moreira-Auditores in Brazil, and member of UHY, adds: “Direct taxes on individuals in Brazil are very low, but this means the tax burden falls heavily on businesses and consumption instead.”
“High indirect taxes can discourage spending and put pressure on business’ margins. Indirect taxes in Brazil are also highly complicated, which can make it hard for consumers to understand how the tax system operates. This complexity will add to business compliance costs too as they have to account for the different taxes.”
Table 1 – Basket of items
Table 2 – Percentage of the total price of UHY’s basket of goods and services that is tax, by country (including excise duties and consumption taxes)*
Table 3 –Percentage of the total price of a litre of petrol that is tax, by country **
*Taxes may vary between states in some countries. For the US, China, Australia, and Canada, taxes are specific to Michigan, Beijing, Perth, and Toronto respectively
**Nigeria, UAE, Malaysia do not levy taxes on fuel
For additional information about this aticle please download the PDF below.
China’s declared backing for SMEs may open doors to foreign investors
Small-medium sized enterprises (SMEs) contribute 60% of China’s industrial output and create 80% of China’s jobs.
But for the year just past, Chinese SMEs have been experiencing hardships: some have been at risk of collapse. Shortages of electricity, capital and labour have led them to this predicament, and soaring costs have made things worse.
Faced with this indictment of faltering growth, the Chinese government’s 12th Five-Year Plan contains a key strategy specifically in support of SMEs. According to the plan, the total number of China’s SMEs will grow steadily over the next five years and achieve an average annual growth rate of 8%.
Five primary missions underpin the plan: to improve the capacity of establishing business and creating jobs; to optimise the structure of SMEs; to boost the development of “new, distinctive, specialised and sophisticated” industries and industrial clusters; to upgrade enterprise management; and to refine SME support systems.
So what opportunities could this prospective economic about-turn hold for investors and foreign businesses looking to penetrate the Chinese SME market?
Key sectors for investment success
Some opportunities relate to China’s ongoing need to modernise and upgrade its technology base; others relate to rapidly growing consumer markets in the country; while others relate to the ongoing processes of structural change within the Chinese economy.
The most commonly mentioned sectors of business opportunity for foreign SMEs include:
- Machine tools — as Chinese companies continue to upgrade technology, reflecting China’s ongoing strength in manufacturing
- Business services — as the Chinese economy continues to develop. Examples are public relations, advertising and specialist financial services, such as factoring, private equity and specialist management consultancy
- Consumer and personal services — such as healthcare and medical services, and education
- Optical fibre manufacturing technology
- Luxury products — such as high specification cars for the growing consumer market, but also niche opportunities, such as ultra-light aeroplanes, yachts and ski equipment
- Low-carbon technologies — environmental products and services, as the Chinese government increases priorities given to environmental protection.
Energy, particularly renewable energy, has great market potential in China, according to economic analysts. The government is taking aggressive measures to steer the country towards lower-carbon energy use. Yet China’s energy use is vast — it is the world’s largest consumer of energy — and it relies on coal for two-thirds of its energy needs.
The Economist Intelligence Unit forecasts that China’s use of solar power, wind energy and hydropower is destined to grow rapidly — though, not so fast that ascendant Chinese renewables firms can feel secure. It projects that the combined share of renewable energy and nuclear power will rise from 13% in 2010 to over 16% at the end of the decade. As a result of this, and a growing appetite for natural gas, coal will satisfy a lower proportion of China’s energy needs. Yet, in 2020 it still expects coal to provide well over half of China’s energy needs — which by then will have swollen greatly. As a result, 35% more coal will be burnt in 2020 than in 2010.
Other sectors identified by economic analysts include services and supplies to the plastics industry; lifestyle products; life sciences (medical supplies, pharmaceuticals, healthcare, biotechnology); automotive and aeroplane technologies; high value brand products; and building products and services.
Key locations for investment success
Investors and exporters study China’s Five-Year Plans to identify sectors that will be supported by the Chinese government. But they also study regional differences in the Chinese market: both regional market conditions and differences in how rules and regulations at local and provincial levels are interpreted. Variation is plentiful — China has 23 provinces, five autonomous regions, four municipalities directly under the central government, and two special administrative regions.
As China’s growth has shifted into lower gear, the larger eastern provincial economies have been bearing the brunt of the slowdown. Expansion in trade, investment and industrial production has slowed to (by national standards) a crawl. Inland provinces continue to outperform their coastal counterparts, much as they did in the aftermath of the 2008-09 downturn.
Even though many western provinces are seeing a deceleration from their previously heady growth rates, they continue to maintain year-on-year GDP expansion of over 12%. They are also recording faster growth in disposable income and household consumption than the coastal provinces.
Although investors might expect that the poorest would be most adversely affected in periods of economic duress, this has not been the case in China. Beijing, Shanghai, Guangdong and Zhejiang — the country’s political, financial and entrepreneurial capitals — are continuing to record the slowest GDP growth rates in the country, at under 8% year on year.
The eastern provinces have been hit hardest because they are much more highly exposed to the property downturn and weakened external environment than the rest of the country. Property investment accounts for roughly one-half of total fixed asset investment in Beijing and Shanghai, for example, compared with less than 20% for poorer provinces, such as Hubei. The eastern seaboard is also more highly exposed to fluctuations in external demand, as many of its manufacturing facilities operate in export-processing.
Falling exports in the eastern provinces have been accompanied by accelerated export growth in central and western provinces, to where a significant amount of manufacturing capacity has since relocated.
Chongqing, Henan and Sichuan, for example, have all recorded a breakneck pace of export expansion, helping to soften the impact of the recent downturn on China’s labour market, as migrant labourers forced out of work in the eastern provinces have instead been able to find employment inland.
Sweetened policy incentives and improved infrastructure to support inland trade, such as dredged rivers, expanded river ports and improved highways, have encouraged manufacturers to move inland. In July, Chongqing and Henan saw export growth of 160% and more than 60% respectively.
Among the fastest-growing provinces are Shaanxi and Chongqing, which are at the centre of the national western development policy, and Guizhou, which has the lowest average GDP per head in the country. All three have maintained annual growth rates above 13%.
Guizhou, for example, is now seeing huge outlays of industrial investment, as well as a massive government drive to develop tourism infrastructure. Property-related investment in July 2012 rose by a massive 90% year on year.
A further notable development is that growth in disposable incomes and consumption expenditure has picked up considerably in many inland provinces. For example, the south-western province of Yunnan has seen expansion in disposable income per head and consumption expenditure of 14.3% and 18.3% respectively, outpacing real GDP growth of 12.6%.
By contrast, the eastern port municipality of Tianjin recorded expansion of just 10.8% in consumption expenditure and 10.1% in disposable incomes. Narrowing the income gap between coastal and inland provinces has long been a priority for the government; the fact that incomes and expenditure in inland provinces are now growing more quickly than on the coast will be welcomed by the government.
Meanwhile, developing the services sector offers a sustainable means of generating long-term growth in China’s eastern provinces. Such a transition is under way slowly; for example, Shanghai is piloting tax reforms that should encourage the growth of smaller services enterprises.
Overcoming barriers to success
Some SMEs enter China with a naïve approach (‘it’s a huge market, I should be there’) without studying whether or not their business proposition is likely to be successful in China. The market is indeed large, but so is the competition in Chinese markets both from local and international suppliers. A second issue is that some SMEs are too optimistic about the extent to which quick gains are possible. Experience shows that businesses need several years to build relations with business partners and government agencies before business will really take off and become profitable.
It is important to invest in the initial years in obtaining an understanding of the business culture in China – and of the specific province in which the SME investor plans to become established. This approach does not only refer to issues such as language, personal attitudes and relations, how business relations are established and developed and how to organise communication with local staff in China, but also to more structural issues.
Foreign SMEs tend to believe, for example, that knowing and understanding the rules and regulations are the key to understanding the local business environment (investment laws, financial and fiscal arrangements, employment laws, etc.), but many tend to overlook that in China power and relationship are much more important than most assume.
Investors need to not just find good local staff and build up relations with local business partners but also to invest in building good relations with local governments and government agencies, such as customs, environmental inspectors and tax offices.
‘First to file’ principle
One specific problem is the so-called ‘first to file’ principle, which means companies need to register trademarks before entering the Chinese market. One foreign embassy in China reportedly advises companies looking to enter China that they should register their trademarks two years before entering. Another embassy reports that 90% of the intellectual property rights (IPR) cases it deals with are trademark related. Issues also relate to production technologies protected by patents.
Although some economic commentators believe IPR issues are often exaggerated, it is widely agreed that they do add to the cost of doing business in China, particularly in the case of smaller enterprises. IPR problems can present more of a challenge to SMEs than larger enterprises, because typically they do not have in-house lawyers, making it necessary for them to outsource legal services.
Quality information
SMEs entering new markets always need information about, for example, market opportunities, potential distributors, laws and regulations, and the availability of business services. However, for SMEs seeking to enter China, access to good quality information is reported to represent a higher cost than in other markets.
Similarly, when entering new markets businesses need to understand the regulations governing those markets, in order to identify the implications for their planned activities. However, achieving this in China requires more than just information about the relevant regulations; it also requires knowledge of how these regulations are likely to be applied. This is a particular challenge because of frequently changing laws and uncertainties about how laws and regulations will be interpreted and implemented, not least because some laws can be conflicting.
Non-tariff barriers exist in several industries, as part of the government’s attempt to protect Chinese enterprises. One example is the banking sector, which not only makes it difficult for financial service providers, but also for enterprises in other sectors to deal with investment issues in China. Another issue is China’s Indigenous Innovation Policy which makes it difficult for non-Chinese owned companies to access public procurement contracts. Chinese companies are favoured because the government believes innovation needs to come from within China.
Recruiting the right local employees can be a major issue. Training is one of the possible solutions to this and several Chambers of Trade and support organisations are involved in cooperating with the Chinese government to set-up advanced technical training.
Fear can also be a key bottleneck (fuelled by reports of bad experiences in China): Chinese partners who keep raising the level of investment required; cases of business partners disappearing; problems with Chinese suppliers, including orders placed but not delivered; and some quality issues.
As a result, one of the messages promoted to SMEs is: ‘Don’t go to China without a reliable Chinese partner.’ China represents a bigger challenge for SMEs than entering many other markets. But SME investors who seek out expert advice and support from organisations with practical experience of the Chinese market are well placed to overcome the barriers. UHY has firms based in key Chinese locations and with local knowledge.
UHY has local firms in China.
CHINA
ZhongHua CPAs
Contact: Wilson Lu
Email: info@zhonghuacpa.com
With offices in: Anhui, Beijing, Jiangsu, Shandong, Shanghai, Shenzhen
Hong Kong
Tai Kong CPA Limited
Contact: Robert Kong
Email: robertkong@tkcpa.com.hk
UHY Vocation HK CPA Limited
Contact: Mica Pang
Email: phc@uhy-hk.com
Investors looking for advice may also wish to contact the UHY China desk in their region. For details, contact the UHY international office at: info@uhy.com
Further details of doing business in China are available on the UHY website under the publications section:www.uhy.com