Orrick's China lawyers have extensive experience in the field of Chinese tax law, having assisted the Ministry of Finance of China in the study of foreign taxation systems through the hosting of a series of biannual seminars dating back to 1979. One of our Chinese legal consultants was a senior tax advisor at a leading international tax accounting firm before joining Orrick and one of our tax lawyers edits the Bureau of National Affairs' Tax Portfolio on Business Operations in China, is the general editor of Commerce Clearing House's Guide to PRC Tax and Customs Law and is the author of Shareholder Agreements and Joint Ventures in the People's Republic of China.
Orrick's tax experience focuses on assisting clients with taxations of a wide range of corporate transactions and other tax matters, such as:
- Foreign Direct Investment: Assist foreign investors in tax-efficient holding and operating structures for their China investments.
- Mergers and Acquisitions: Assist foreign strategic buyers and venture capitalists on their acquisitions and joint ventures in China, from the initial stage of tax due diligence and tax-advantaged deal structures to tax-minimized exit structures. We also counsel on tax implications of pricing negotiation for both buyers and vendors, as well as post-acquisition tax integrations.
- Financial Services: Advise on tax matters involving innovative financial products and transactions. Our practitioners have participated in two landmark transactions in China's financial industry, the first foreign investment project in China's Non-performing Loan (NPL) market and one of the first pilot asset securitization projects in China.
- Outward Investment and IPOs: Assist Chinese domestic companies in the tax structure for their outward investment and/or IPOs.
- Indirect Tax Planning: Advise on international and domestic trading activities for indirect tax planning, including Value-added Tax, business tax and Customs Duty.
- Transfer Pricing: Advise on tax planning strategies, documentation and advance pricing agreements, including economic analysis, financial modeling and tax efficient supply chain management models.
- Individual Taxation: Advise on estate planning as well as employee tax issues, including employee share options plans and related matters.
Recent Representative Matters
- Quaker Chemical Corporation, a worldwide developer and marketer of chemical specialty products, in connection with its tax efficient purchase of the interest of its joint venture partner in China. Quaker used dividends to pay a portion of the purchase price, allowing the Chinese seller, which had already paid tax on such profits, to obtain a rebate of a portion of the tax paid. Quaker was able to reinvest the dividends declared in a new, high-tech entity in China, enabling Quaker to receive a 100% rebate of the tax paid on the dividends reinvested.
- One of the world's largest electronics manufacturers on its purchase of equity interest from the Chinese joint venture partner and provided extensive advice on all aspects of the transfer including approval procedures, foreign exchange issues, tax implications, state assets evaluation and guarantee for the joint venture's debts.
- Master Replicas, a manufacturer and marketer of movie and television prop replicas, on the tax aspects of its combination with Hong Kong and U.K. companies.
- Numerous multinational companies, private equity and venture capitalists on tax due diligence and tax structuring of their acquisitions and joint ventures in China.
- CRH, an international building materials group, on the tax-efficient investment structure for its China acquisitions and joint ventures.
Recent Representative Publications
- "Changes in Foreign Investors' Mergers and Acquisitions, and Joint Investments with Domestic Investors," Asian Counsel, October 2006
- "Structuring investments and operations: China and Hong Kong update," Asian Counsel, October 2006
- "China Customs Valuation: Software Exempted; E-Content and IP Royalties Still at Risk," China Law & Practice, September 2006
- "China Employee Retention, Share Options & Tax-Planning, Asian Counsel Magazine," July 2005
- "Customs Treatment of Related Fees: Tax Planning Under WTO," China Law & Practice, July 2003