CLIENT: Our client is a US based enterprise specializing in energy products. They source from China and import to North America and other parts of the world. They see China as a growing market for selling their products and currently have an opportunity to sell to a Chinese customer.

PROBLEM: Our client does not have a satisfactory structure to sell to this customer in China.

The ultimate customer requires our client to issue a Value Added Tax (VAT) invoice and receive payments in Renminbi (RMB). Since our client is a US company, they do not have a China entity to facilitate such requirements.

The client also cannot have their products shipped easily from the factory to their customer, as having the parties in direct contact could jeopardize their business.

As setting up a Chinese entity (WFOE) can take 3 to 5 months and our client wants to capture this opportunity immediately, they must find a way to sell to their Chinese customer and deliver products on time or else they would lose this business.

SOLUTION: Through a comprehensive analysis of the client’s current business requirements, ICS TRUST provided the client with short and long term solutions that allow them to sell domestically in China, as well as overcoming their logistical, tax and confidentiality issues.

As an immediate solution, ICS TRUST created a mechanism that allows a PRC entity to sell to the Chinese customer with a VAT invoice and get paid in RMB. Our solution provided the client with the necessary assurance of confidentiality and fulfilled the requirements of both the client and their customer. All of these were done in a fully compliant manner and as a result, the client is able to immediately sell to the China market.

In the long term, we helped the client to set up a WFOE in China that allows them to generate invoices and receive payments in Reminbi. With the WFOE set up, we act as the client’s trading back office and are able to handle all trade related matters including invoicing, shipments and letter of credits. ICS TRUST also liaises with and manages all vendors, customers and freight forwarder to ensure on time shipment arrival. As part of the VCFO services we offer, we help our client with their accounting, treasury, banking and regulatory compliance in China.

With the assistance of ICS TRUST, our client is able to capture the opportunity in China in the short run and establish a stable business structure to further expand their trade business in the long run.