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China Weaves a Tax Net over Offshore SPVs
It is common for multinational national companies to deploy offshore holding structures or set up special purpose vehicles ("SPVs") to engage overseas investment, enter into cross border transactions or go IPO. Tax optimization is one of the top considerations for companies to utilize such structures. In recent years, governments around the world have been tightening their tax administration of cross-border tax avoidance arrangements. In 2009, China's State Administration of Taxation issued a series of regulations to strengthen tax scrutiny of non-residents. This article summarizes Chinese tax regulations over non-residents and assists the companies in evaluating tax implications of existing company holding structures so that adverse tax impacts can be mitigated by active actions.
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First Landmark Decision in Obtaining Recognition and Enforcement of A PRC Court Judgment in the US
The products liability case initiated by Hubei Gezhouba Sanlian Industrial Co., Ltd. and Hubei Pinghu Cruise Co., Ltd. against Robinson Helicopter Company, Inc. is a landmark case in which a PRC court judgment was successfully recognized and enforced for the first time in the US. For Chinese enterprises and individuals to file application abroad for the recognition and enforcement of PRC judgments in any actions involving foreign parties, the decision of the US District Court of Central District of California opens the door.
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Forum Shopping for Dispute Resolution: Hurdles and Solutions
Foreign party often insists to elect a foreign jurisdiction to settle disputes in international financing contracts, to which a Chinese entity is the counter party. However, selecting a foreign jurisdiction to settle disputes in such contracts may place foreign parties doing business in China under great risks, as the judgments and interim relief rendered by a foreign court may not be recognized or enforceable in China. This articles attempts to propose a feasible solution to this dilemma encountered by foreign companies by analyzing relevant Chinese laws and regulations.
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China's First Court Ruling on Personal Financial Service Disputes Says Banks Are Not Liable for Damages of Clients' Financial Products
Beijing Oriental Plaza Sub-branch of ABN AMRO (China) Co. Ltd was sued by a Chinese individual investor for fraud and breach of the bank's duties when providing financial services. Beijing Dongcheng District People's Court rejected the plaintiff's claim over losses from the investment in a yield enhancement product managed by ABN AMRO on the ground that the bank had properly disclosed the investment risks. This ruling is the first ruling rendered by a Chinese court to clarify the financial institution's responsibilities when selling financial management services and performing financial management contracts. It sheds light on the trial of similar cases.