China and the Environment
China is “open for business,” but not open for any business. Certain foreign industries are not permitted to operate in China for security reasons, and to a much greater extent, heavy, polluting industries are being shunned. Gone are the days when companies could look to China as a cheap way to circumvent restrictive and expensive environmental laws.
At IPO Pang we understand that a comprehensive, sustainable environmental strategy is not only what is needed to meet the current Chinese government requirements, but it is also the moral and “right thing to do.” It should be a part of every foreign enterprise’s strategic business plan. We welcome you to read more about our environmental law and consulting services.
Labor Law in China
China, with a population of 1.3 billion has a vast labor pool. China boasts over 2,000 post-secondary institutions with a typical student load of about 4.5 million. Literacy is over 90%. Salaries vary as a function of location, with top-tier cities generally having higher salaries than second or third-tier cities. Compensation is a combination of base salary plus benefits such as housing and phone allowance, New Year bonus, and so on; benefits typically amount to 50% of the base salary. Monthly base salaries range from less than 2,000 RMB (approximately USD 300) for unskilled labor (including retail clerical workers, restaurant workers, etc.) to 50,000 RMB (approximately USD 7,500) for the top tier of management in a high tech company. Even as salaries rise, China’s labor costs remain competitive compared to other foreign countries, particularly given their relatively high education levels and most important of all, increasing proficiency with English. Labor laws are constantly being revised, and foreign companies that operate in China are well advised to ensure that their practices remain current and compliant. We welcome you to read in detail about labor law and the labor situation in China which, in our opinion, remains extremely attractive for foreign companies.
Taxes in China
In years gone by, China had national policies that offered tax benefits to foreign companies, but since 2007, foreign and domestic companies alike have been subject to a nominal base tax rate of 25%. That being said, national and regional governments continue to offer tax incentives in certain key industries, and in certain locations, particularly in the form of rebates on export sales. Still, taxation in China is perhaps the most widely misunderstood area of Chinese law. It is characterized by archaic and complex regulations, and even a foreign-owned entity with the best of intentions can find itself running afoul of the tax code. Read more here about the risks posed by the complex universe of Chinese tax laws and how IPO Pang can help to design and implement tax programs that will minimize tax-related down time and maximize value.
And, of course, we welcome you to contact IPO Pang to discuss how we may be of service to you.