How to Restructure an Underperforming Business in China-Preview

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In China, problems with a foreign entity’s business
can occur suddenly and for a variety of reasons.
Labor costs may increase, tax incentives can be
removed, and the way in which foreign investment
is treated in a particular industry can be altered.
In addition, despite the vast scope that exists for
profit, the China market can be a difficult one to
conduct business in. A foreign company with a
flawed market entry plan
or the wrong staff in key
positions is likely to incur
substantial losses.
Decisive ac tion is the
most effective solution for
companies encountering
these kinds of problems in
China. While de-registration
and de-establishment is
a common and, at times,
correct course of action for
a foreign entity to take, there are also a number
of other available options that might better suit
a company’s individual situation. These include
business conversion, company divestiture and
‘temporary dormancy’.
In this issue of China Briefingmagazine, we explore
the options that are available to foreign firms
looking to restructure or close their operations
in China. We begin with an overview of what
restructuring an unprofitable business in China
can entail, and then take an
in-depth look at the way in
which a foreign company can
go about the restructuring
process. Finally, we highlight
some of the key HR concerns
associated with restructuring
a China business.
With 23 years of experience
in the China market, Dezan
Shira & Associates can ensure
that your company chooses
the right restructuring option and can further
guide you through the relevant procedures.
This Month’s Cover Art
Radiance by 田力
Printmaking
Wan Fung Art Gallery
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© 2015 Asia Briefing Ltd.
Reference
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are produced by Asia Briefing Ltd.,
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Content is provided by
Dezan Shira & Associates.
No liability may be accepted for any
of the contents of this publication.
Readers are strongly advised to seek
professional advice when actively
looking to implement suggestions
made within this publication.
Introduction