ICS Trust (Asia) Limited - March 1st NewsFlash

ICS TRUST - Bringing Businesses to Asia, Since 1980

Celebrating 25 Years of Success!

ICS TRUST would like to thank you
for your continuous support over the years.

You have been an essential part of our business.

NEWSFLASH: CHINA'S REVISED COMPANY LAW - LIMITED LIABILITIES QUESTIONABLE

March 1st, 2006

In providing customized commercial and structuring solutions to multinational entrepreneurs and SME's operating in Asia, ICS TRUST has consistently advised clients to hold their China investments through a Hong Kong limited company as an effective means of shielding liability for the overseas parent company. The significance of this structural setup was brought into sharp focus by the recent revisions made to China’s Company Law.

The amendments made to China's Company Law that went into effect on 1 January 2006, introduced the principle of piercing the corporate veil. By implementing this principle, Chinese courts can now act beyond the limited liability status of shareholders in scenarios where shareholders of a limited company abuse the privileges of their incorporation. In practical enforcement, should a shareholder manipulate the limited company for the purpose of evading liabilities, and thus damage the interests of the creditors of the company, the individual shareholder shall assume unlimited liability for such actions.

Foreign investors are obliged to comply both with the revised company law and with specific foreign investment related laws and regulations.

As a result of the implementation of the new legislation in China, Hong Kong holding structures have assumed an increasingly significant role in providing a liability firewall that shields foreign head offices from risks that may arise from direct engagement in operations in China or from working with potentially high-risk partners.

For further information on the reforms of China’s Company Law, please visit:
http://www.omm.com/webcode/webdata/content/publications/clpnf20051108.pdf

For inquiries or comments, please feel free to contact ICS TRUST, and we look forward to keeping you up to date with further news from Hong Kong as it breaks.

About ICS TRUST

Since 1980, ICS TRUST has been the market leader in helping entrepreneurs and successful, privately-owned businesses establish and grow their operations in Asia.

For more than 25 years, Hong Kong-based ICS TRUST has been the gateway to China and Asia for businesses from around the world. We understand that our clients want to capitalize on the lucrative opportunities in the China marketplace, but the process is complex and often confusing. With ICS TRUST's team of corporate, legal, financial, accounting, banking and trading experts working together, we are able to provide customized, strategic business counsel to you in order to minimize the risk and maximize the success of your investment in Asia.

Services Provided by ICS TRUST
Corporate Services Integrated Financial Solutions China Structuring Services Asian Trade & Commercial Solutions High Net Worth Client Services		China Business Advice & Structuring Establishing Business in Asia Direct Import Program

For more information, please contact our Marketing Manager, Daniel Booth.

If you do not wish to receive future newsletters, please reply with "Remove" in the subject line.

ICS TRUST (ASIA) LIMITED
8th Floor, Henley Building 5 Queen's Road, Central Hong Kong		Tel: (852) 2854-4544 Fax: (852) 2543-5555 or 2543-4080 Email: ics@icstrust.com Web: http://www.icstrust.com

Disclaimer: These notes, although considered to contain correct information, are for general information only and should not be considered as legal or tax advice. No responsibility is assumed by ICS Trust (Asia) Limited or its affiliates for any person acting on the information contained herein.