Company Highlight (2014 Q3)
Thanks for the invite from HKCPA, we had the chance to participate in the Shenzhen Qianhai Modern Service Collaboration Zone Tour cum Shenzhen-Hong Kong Accounting Firm Exchange. Through this event, we gained a much deeper understanding for -the future of Qianhai. Moreover, we had a fruitful dialog with other accounting firms in Shenzhen and Hong Kong.
Event Name: The Shenzhen Qianhai Modern Service Collaboration Zone Tour cum
Shenzhen-Hong Kong Accounting Firm Exchange
Location: PRC-Shenzhen-Qianhai
Date: 17th Oct, 2014 (3rd Quarter)
In the past few years, China has prioritized the development of Qianhai, Shenzhen, hoping to turn this 15-acres land into China’s Manhattan. In this trip, we visited Shenzhen Qianhai Modern Service Zone, Qianhai Exhibition Hall, and Qianhai e-stop. With the local host showcased we learnt the reasons of Qianhai’s rapid development in the past few years and the reasons why it attracted a numerous investors now and in the past. A concurrent event on the same day was an exchange between the Shenzhen Association of Certified Public Accounts and the HKCPA. Ms. CY Chan, our director enthusiastically shared her views on how to help clients establish business and office in China and other overseas jurisdictions. Throughout the day, our firm has established connections with other firms in the industry.
Thanks for the trip in China-Shenzhen, our firm has grasped a much deeper understanding of Qianhai’s future. In the market dynamics column, we will further discuss Qianhai’s potential as a step stone into the huge market in China.
Market Flash
The Unique Qianhai
Qianhai, known as Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, is located at the west of Shenzhen NanShan peninsula, a place that take less than an hour away from Zhuhai, Zhongshan, Guangzhou and Dongguan and which is within a 30-minute traveling radius of Hong Kong. Under the supervision of the Shenzhen Planning Department, Qianhai has transformed itself from waters into a 14.92-square kilometer piece of land.
The zone is divided into “three areas, six industries”, i.e. Guiwan District (桂灣區) for financial development, Liwan District (荔灣區) for culture and technology development and Mawan District (媽灣區) for logistics services development. “Six industries” include major economy, innovative finance, modern logistics, professional technology services, telecommunication, media, and value-adding services. Nowadays, 14,597 companies have been established in the zone, including 53 Fortune Global 500, where 43% are foreign ventures, detail are listed as below:
Qianhai has a favorable environment to attract new establishments, including (1) tax reduction policy, (2) financial support, and (3) qualified personnel management.
(1) In 2012, the Qianhai government introduced a 15% tax reduction for qualified firms and provides quite a number of subsidies to talented workers and exemption on individual income taxes.
(2) In financial aspect, Qianhai is now exploring experimental cross-border capital transaction bridges. The possibility of cross-border RMB loans, cross-border insurance services, cross-border joint-investment loans are now being considered. By attracting the influx of foreign capital and allowing non-restricted interest rate, investment flexibility and return rate can possibly be raised.
(3) China’s rapid development creates a significant surge of internal demand, the relationship between Hong Kong and China has became “front-desk, back-store” relationship. That means, Hong Kong continues to provide professional knowledge and acts as a bridge to access into foreign market, while Qianhai acts as a middleman, receiving trade opportunities from China.
If you are foreign investors, Qianhai acts as your step stone for entering into the Mainland. Qianhai puts the spotlights on developing prioritizes the service sectors, especially in financing and inbound logistics industry. Per latest figure, there are in total, 6,500 firms invested in Qianhai in the first half of 2014, with 60% coming from the financing industry. It is all because in Qianhai, company can enjoy a larger room for development and better business opportunities.
However, investors may need to concern about the set up procedures, e.g. for companies who planning to conduct domestic sale in PRC, a number of paperwork is still required and the process time of authorization is relatively long compare to Hong Kong. Our company will provide customized services and professional support to those who has plan to enter the domestic market and conduct local sale, therefore we are always welcome any enquiry in investing and doing business in PRC.
For companies with no strong interest in entering the Chinese market, we would suggest them to invest in Hong Kong. As Hong Kong has a comparatively lower tax rate across the globe, relatively low barriers for capital flows and no remittance restriction, all of which allow companies to make higher earnings. In addition, quick and simple set up process with no restriction to foreigners allows companies to enter Hong Kong markets relatively fast and easy.
Therefore, to decide which jurisdiction for setting up your company, it is important to not just think about policy support given by local government, but also to think about the business plan, needs and other factors that direct and indirect affect your company. If you need more information about Qianhai and above discussed issues, welcome to contact us to have a professional consultation for your business.
Client Introduction
Huaju Tech was established in 2003, which specializing in corporate information technology consulting services, enterprise application software development, system integration and IT maintenance services.
Through years of development, our client has developed a comprehensive IT infrastructure, in which to provide quality data solutions to their customers. Now, they has grown to become a leading software reseller in China which continuously deliver “Hi-available” solutions to their customers with professional consulting services. In addition, our client has established a solid cooperation with a number of famous international IT vendors, which include:
U.S. vendors: “Trillium Software” and “Stratus Technologies”, Australia vendors: “Integrated Research Prognosis” and U.K. vendor: “Live Sense Pro”, etc…
Customers of our client are in all over the world, including China, U.S., Canada, Malaysia, Singapore, Taiwan, Hong Kong, Japan, Australia, etc… Their customers also from different industry, such as “Standard Chartered Bank” and “Citi Bank” etc. are from banking and finance industry, “Charles Schwab” and “Canon” are from commercial and retails industry, etc…
If you interested to know more about our client, you may visit www.hi-available.com
