Now the world’s second largest economy and long since the most populous nation on earth, China oﬀers enormous opportunities for foreign companies, both as a manufacturing labor pool and, increasingly, as a consumer market of seemingly endless potential.
Since Deng Xiaoping’s “reform and opening-up” policy for 1978, China’s GDP has developed at an unprecedented rate for over 30 years. However, with China experiencing a long-term deceleration in economic growth and embroiled in a trade war with the US for over a year, the situation looks more complicated than at any point in recent memory.
Yet, China’s endeavors to improve its business environment continues to attract all kinds of investors. China’s ranking in the World Bank Group’s Doing Business 2020 study climbed to 31st in terms of ease of doing business, up from 46th a year earlier, and 78th in 2017. This is the second time that China joined the group of the world’s top 10 most improved economies, mainly due to the business reforms performed in various areas, such as market access, tax, intellectual property protection, as well as processing of permits and licenses.
Under these circumstances, it is becoming more important for investors to get familiar with the changes in China’s business landscape, identify areas of risk and accordingly take steps to mitigate their exposure. Only in this way, investors can stay nimble and opportunistic in an otherwise challenging time.
Designed to introduce the fundamentals of investing in China, this publication is compiled by the experts at Dezan Shira & Associates, a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and ﬁnancial review services to multinationals investing in emerging Asia.
Doing Business in China 2020 covers the following:
- Establishing and Running a Business
- Tax, Audit and Accounting
- Human Resources and Payroll
Within these chapters, we discuss a range of different topics that affect doing business in China, including investment models, intellectual property considerations, key taxes applicable for foreign companies, and various types of employment contracts. We examine how a foreign entity can convert its representative office (RO) into a wholly foreign-owned enterprise (WFOE), and discuss how to legally terminate an employee in China. In addition, we analyzed the impact of the new Foreign Investment Law that will come into force starting from January 1, 2020.