CLIENT:

Our client is a USD 30 million-a-year automotive parts manufacturer based near London, Ontario.

PROBLEM:

After a two-week, fact-finding trip to China, the President and CFO determined that their company would be out of business in three years if it did not find a way to turn China's low-cost manufacturing base to its own advantage.

SOLUTION:

ICS TRUST has established a strategic working partnership with this company, allowing its President and CFO to concentrate on the business at home, while ICS TRUST handles the business in Asia – banking, payments, trading. To ensure our client can successfully cope with the challenges of establishing a business in China, we have done the following:

1. Strategic Structuring Advice: In two extensive strategy meetings with the President and CFO, we agreed on the correct international corporate structure needed to do business in China. We are also offering ongoing consultation on the culture of work, business and government in China.
2. Hong Kong Structuring: We incorporated a Hong Kong subsidiary to act as the Asian headquarters of their North American corporation.
3. China Structuring: We established a Representative Office in the Shanghai area to handle on-the-ground support for sales and quality control in China. We helped the client to negotiate the lease agreement in China and the office renovation contract.
4. Banking: We set up all bank accounts required, including choosing the bank and introducing the clients. ICS TRUST acts as a signatory to the accounts to facilitate minute-to-minute trade on an Asian-time basis (while head office staff are sleeping) ensuring that our client's business is done 24 hours a day.
5. Employment: We prepared and submitted work visa applications for two staff of the Hong Kong company. We have also reviewed their employment contracts and remuneration, to ensure their employment packages are tax-effective, considering the high tax rates in China.
6. Trade: We have advised on the company's payment terms and redesigned the specifications provided to the factories, taking into account our client's desire to take advantage of Hong Kong's zero tax rate. We have also translated their purchase orders into Chinese.
7. Intellectual Property: We have applied for trademark protection for our client's three lines of business in both Hong Kong and China.
8. Accounting: We will prepare management accounts for the head office and annual financial statements. We will have the statements audited in accordance with Hong Kong law.
9. Taxation: We will continue to advise on Hong Kong taxation and to liaise with the company's Canadian tax advisors. Upon submission of the initial set of accounts, we will respond to the Hong Kong Tax Department's queries and provide any supporting documentation required.

CONCLUSION: 

Within three months of commencing their review of competition from China, our clients are in business, using Hong Kong as their gateway and ICS TRUST as their strategic partner.