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Q&A

What are some of the types of acquisitions and corresponding procedures?

What are some of the types of acquisitions and corresponding procedures?

In China, one company can acquire another in several ways, including purchasing some or all of the company’s assets or buying up its outstanding shares of stock. For share acquisitions, investors can acquire the equity or subscribe additional r...

Q&A

What is a “letter of intent” and what should be done after initial investiga...

What is a “letter of intent” and what should be done after initial investiga...

A “letter of intent” aims to outline the matters that the two parties are going to discuss and lay out the complete procedures for doing so. It is then crucial for both parties to employ an asset evaluation agency which is established und...

Q&A

What should a company do after signing an acquisition agreement?

What should a company do after signing an acquisition agreement?

Investors should apply for the “Certificate of Approval for Foreign Investment” from MOFCOM or its local level branches according to the investment amount, type of enterprise, and the industry to be invested. In addition, verification by ...

Q&A

Which party is responsible for registering new business licenses and what are th...

Which party is responsible for registering new business licenses and what are th...

After receiving the approval certificate from MOFCOM, foreign investors engaged in asset acquisitions have 30 days to register the acquired domestic enterprise as a foreign-invested enterprise(FIE) with the SAIC or its local branches. On the other ha...

Q&A

How is Corporate Income Tax determined for acquired companies in China?

How is Corporate Income Tax determined for acquired companies in China?

Under the PRC Corporate Income Tax (CIT) Law, which applies to both domestic enterprises as well as foreign and foreign-invested enterprises, income arising from the transfer of equity and assets (both fixed and intangible) is subject to CIT. While a...

Q&A

Why is it important to conduct due diligence before entering the Indian market?

Why is it important to conduct due diligence before entering the Indian market?

Carrying out due diligence can  provide an investor with substantial information on business opportunities in their proposed market.  In fact, it could be stated that the purpose of due diligence is not to learn everything about a business ...

Q&A

How can the due diligence process help a foreign investor to traverse the Indian...

How can the due diligence process help a foreign investor to traverse the Indian...

A company’s success is in turn linked to the risk management and mitigation strategy that it undertakes. It is in this regard that due diligence becomes a powerful tool that companies may utilize when dealing with Indian businesses. Due diligen...

Q&A

Why should companies conduct due diligence in India?

Why should companies conduct due diligence in India?

There are two primary reasons why a company should conduct due diligence in India. Firstly, a company that plans to trade with an Indian company should verify that the business is what it appears to be. This is vital in India because several companie...

Q&A

Why is it crucial for companies to determine their market entry strategy in Indi...

Why is it crucial for companies to determine their market entry strategy in Indi...

Particularly related to FDI, foreign exchange, security, and corporate law, as well as direct and indirect taxes, regulatory clearances can be very crucial. It can take a long time to obtain as several clarifications may be required before final appr...

Q&A

What are some of the points which need to be taken into consideration when condu...

What are some of the points which need to be taken into consideration when condu...

When entering the Indian market, investors cannot fail to note the potential of the country’s large and diversified labor pool. Therefore, it is essential for foreign companies to conduct thorough due diligence when navigating the country&rsquo...

Q&A

What are some of the risks involved when companies do not pay attention to HR du...

What are some of the risks involved when companies do not pay attention to HR du...

Operational and financial risks are involved if companies do not conduct HR due diligence in India. Operational risks include a high employee turnover rate, problematic labor relations, and differences over work culture. Firms entering the India mark...

Q&A

How does the India government decide when to build a trade union?

How does the India government decide when to build a trade union?

India’s trade union movement is rooted in the country’s early acceptance of a mixed economy with an incorporation of both socialist and capitalist systems. According to the law, when the number of blue-collar workers at a location exceeds...

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