How to handle Legal, Accounting and Tax issues?

China has had consistent dynamic economic growth, which has led to continuous rapid transformations in the economy. Nothing is fixed. Thus, when entering into a contract with a Chinese partner, make sure that your attorney keeps up-to-date not only on what has recently changed, but also on what is about to change.

Any agreement should be written by an attorney familiar with the requirements of Chinese business law. It must be written both in Chinese and in English. In choosing a Chinese attorney, spend some time interviewing him to be sure that you communicate well.

Foreign companies in China before the end of 2006 will pay the current Tax rate until 2011. The new plan calls for phasing in tax increases in five years, perhaps starting at about 24 percent and gradually increasing until domestic and foreign companies pay the same rate.

All the Big Four accounting firms (KPMG International; Price Waterhouse Coopers; Deloitte Touche Tohmatsu; and Ernst and Young) have established offices in China and provide services ranging from providing advice on taxation matters and preparation of investment feasibility studies to setting up accounting systems that are in compliance with Chinese law.

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