Why A Pre-Deal Study Of The Investment Environment And Overall Tax Position Is Critical For The Success Of A Business In Post-WTO China?
China's WTO commitments amount to much more than tariff reductions. Other important areas involve the implementation of the commercial regulatory framework and the resulting change in government and private sector responsibilities. However, while many WTO changes in China are foreseeable, a good deal of them cannot be predicted with certainty. A pre-deal study of the investment environment and overall tax position is therefore critical for the success of a business in post-WTO China.
The WTO has also provided a new and powerful tool kit to the foreign investor for doing business in China. However, this tool kit is not ready-made and is subject to modifications from time to time, some of which have positive or negative aspects. To take advantage of the post-WTO environment, foreign players should have a clear alignment of their business tax strategies and skillfully adopt tax-planning techniques to optimize their group's tax position after the deal is completed.
When doing business in a tax-driven regulatory environment such as China, a victorious and profitable result is always attributable to efficient and effective tax planning throughout the deal process - starting from the first day that the deal is contemplated, and continuing until the day the investment is repatriated.