Asia Market-Entry Services
There are a variety of ways in which a company can enter Asian business markets but a well-constructed approach to market-entry is crucial. No single market-entry strategy works for all international markets and this is especially true for businesses that are established in and/or operating in Asia. Direct exporting may be the most appropriate strategy in one market while in another market licensed manufacturing may be the best choice and in another market setting up a joint venture is the only or most effective solution. There will be a number of factors to consider when entering the Asian markets; such as, marketing and transportation costs, registered capital requirements upon the establishment of a business, administrative burdens of complying with local tax and other laws, political stability, risk of intellectual property theft, corporate income tax and duty rates, foreign exchange controls and withholding taxes when profits are remitted to overseas corporate headquarters.
When initially conceptualizing market-entry strategies into Asia, we take into account the above-mentioned considerations, and can help our clients choose the appropriate location for their operations and a tax-optimal business structure, assist with the preparation of business plans, assess market potential, growth and competition, carry out cost–benefit and risk analysis and conduct other market research activities.
The list of factors to consider upon market-entry is extensive and rather than applying a one size fits all approach, we sit down with our clients and spend time to listen to them and evaluate how we can tailor a service package especially suited to their needs. The insight of Moxiu’s localized knowledge, along with the advice provided by our law, finance human resources and business professionals allows us to assist our clients with a broad-range of market-entry consulting services including but not limted to the services below.
Legal Services: A well-constructed approach to market-entry is crucial and seeking the advice of experienced legal professionals prior to entering into Asian business markets to discuss your business plan while learning about intellectual property protection mechanisms, available corporate structures, licensing requirements, compliance obligations, industry specific laws and the legal and finance systems of a new market is often invaluable.
Whether a start-up project or the acquisition of existing operations, we assist with all areas of law such as: company establishment, trademark and intellectual property registrations, opening subsequent offices, corporate restructuring, due diligence during asset or company acquisitions, background checks on potential customers and business partners, creating shareholders, joint venture and strategic alliance agreements, drafting licensing, financing and franchising contracts, advising on employment and social insurance, agri-food, environmental, sports & entertainment and other industry specific laws and property ownership structures in Asia, completing real estate transactions and assisting with tax structuring, profit repatriation and wealth preservation.
Intellectual Property Protection: Prior to engaging in initial market-entry activities such as attending business conferences or meetings with potential customers or conducting marketing, we highly advise our clients to submit applications to register patents, trademarks and/or copyright. Before moving forward with doing business, we advise our clients to enter into dual language contracts with potential customers containing strong non-disclosure, non-use, non-solicit and/or non-circumvent clauses and to develop business systems that will help reduce the risk of intellectual property theft.
Corporate Structure and Offshore Services: After meeting with your legal team and creating intellectual property protection mechanisms, we advise our clients on establishing tax-efficient corporate structures. Many mid-sized businesses benefit from incorporating a holding company in Cayman Islands, Hong Kong, Singapore or another tax efficient jurisdiction to control operational companies in China, Japan and Southeast Asia.
The benefits of setting up a holding/management company in countries such as Hong Kong include taking advantage of clear and stable legal and finance systems, reducing taxes, having an entity which can easily bring in (or remove if necessary) shareholders as investors and business partners. In addition, if a holding company experiences success in one country, such as China, and then moves on to establish multiple operating entities in China and/or in other Asian countries, the holding company often becomes a valuable asset which may attract new investors and/or potentially be sold or listed on a stock market.
Hong Kong: For clients who are investing into China, many establish holding companies in Hong Kong. We offer a full range of legal, accounting and business services and are also licensed to incorporate companies, provide corporate secretary services and register trademarks in Hong Kong. Providing a full range of services in both Hong Kong and China is often much more efficient for our clients who would otherwise hire multiple firms in both countries. Many of our clients also not only utilize their Hong Kong business entities as holding companies but also conduct business inside of Hong Kong, and our lawyers, accountants and consultants are readily available to assist.
Establishment of Operating Companies: Establishing an entity in China, Japan or Southeast Asia involves multiple procedures and the physical filing of notarized and executed local language documents with various government departments and such procedures can become complex and time-consuming. We specialize in establishing foreign invested entities such as wholly foreign owned enterprises (WFOE), joint ventures, general and limited partnerships and limited liability companies in China, Japan and Southeast Asia and also assist with applications for particular licenses when required. In addition, we also provide physical or virtual addresses that are required during company establishment upon the request of our clients. Having one firm assist with establishing holding companies in tax efficient jurisdictions and also establishing operational subsidiaries in Asia’s major markets streamlines the process, instead of spending time to meet with multiple firms regarding corporate structure, our clients to begin to focus on securing business deals shortly after meeting with our professionals.
Corporate Compliance: Foreign-owned companies in Asia are obligated to comply with complex corporate, securities, tax, anti-corruption, anti-bribery and other laws and regulations that international business owners are often unfamiliar with. In addition, personal liability for actions taken by a company in Asia may be regarded differently than in other Western countries, which also makes corporate compliance a particularly important consideration for our clients. We offer a comprehensive range of services to help our clients develop appropriate compliance policies and systems to ensure they are in good regulatory standing both at home and abroad.
Hong Kong Company Secretary Services: Moxiu is a registered Trust Company Service Provider holding a TSCP license and is often in engaged by our clients to act as Company Secretary (as defined in the Hong Kong Companies Ordinance). We provide a registered business address, prepare documentation for and file the Company’s annual return, organize and maintain the statutory documents of our client’s company, allot shares, appoint and/or remove directors and shareholders, and take measures to ensure the company is in compliance with government regulations.
Accounting & Tax: Due to unique and mandatory tax-filing and other regulatory compliance laws in Asia, the small and medium-sized enterprises (SMEs) we assist often require outsourced support with back-office administration, accounting and tax matters.
Since the majority of our clients are SMEs that require both legal and accounting/tax services; to respond to their needs, our lawyers work alongside our finance and accounting experts to establish accounting management systems for our clients. Our professionals continue to administer these management systems until our clients are ready to hire internal staff to complete accounting/tax and administrative tasks in-house or we alternatively continue to provide long-term outsourced accounting and/or administrative support.
We also assist by establishing accounting systems to fulfil mandatory monthly, quarterly and yearly accounting, tax and governmental compliance procedures. Our experienced accountants and tax advisors offer hourly consultations on profit repatriation and lowering corporate, VAT and other taxes and these consultation sessions often prove to be invaluable for our clients.
Employment and Work Visas/Human Resources: With a corporate structure in place, we assist expatriate executives with applying for foreign work permits and provide assistance with hiring employees such as drafting employment contracts and setting up social insurance accounts and payroll systems.
Our human resources professionals work closely with our labor and employment lawyers and our accounting and tax professionals to provide our clients with a range of services such as: advising on labor and employment law compliance requirements, employee recruitment, labor outsourcing or labor dispatch services, applying for foreign work permits for expatriates, setting up corporate bank accounts and social insurance and individual income tax accounts, fapiao issuance services, payroll solutions (e.g. payment of social insurance, housing fund, individual income tax and employee salary payments), drafting employment contracts, employee handbooks, internal employment and work safety rules, intellectual property protection agreements, termination agreements, shareholders agreement, and stock option and profit-sharing plans. We also provide arbitration, mediation, settlements and dispute resolution services.
Contract Drafting: We specialize in drafting contractual clauses to protect international corporate investment and have years of experience with drafting commercial contracts of various kinds with non-standard clauses that must be developed to suit our client’s particular needs in each case. At the outset of drafting major international commercial contracts, we help our clients gain an understanding of the legal systems, business practices and cultures of the counterparty’s country and local district. Without guidance from local counsel, a foreign company may rely on contractual provisions that are overridden by provisions of local law or the foreign company may be unaware of important statutory rules that can have a significant impact on their rights under the agreement.
During the process of drafting contracts, we have advised clients in every sector of the economy on a wide spectrum of corporate and commercial matters. For example, we have experience with handling commercial contracts for services, licensing, development, distribution, marketing, manufacturing, outsourcing, support and maintenance companies. We draft contracts for construction, sports and entertainment and agriculture and agri-food companies, businesses with environmental and innovative technologies and draft contracts for small and medium-sized enterprises that are developing new businesses or expanding operations throughout Asia.
We regularly draft international trade contracts and advise on laws that are unique to particular countries and districts, such as the validity of restrictive covenants, licensing and labelling requirements, environment and tax regulations, choice of applicable law and forum and mechanisms for dispute resolution. We also specialize in creating shareholders, joint venture and strategic alliance agreements and drafting licensing, financing and franchising contracts and real estate related agreements such as commercial leases, agreements for the purchase and sale of real property and residential tenancy agreements. Our contracts can be drafted in English, French, Chinese, Japanese and Thai languages.
Market Research: When initially conceptualizing market-entry strategies we offer our clients assistance with choosing the appropriate location for their operations and a tax-optimal business structure and can also assist with the preparation of business plans, assess market potential, growth and competition, carry out cost–benefit and risk analysis and conduct other market research activities. We can also assist with conducting industry specific research in areas that we specialize in such as international trade, food & beverages and products sales, franchising, sports and entertainment, agri-food and environmental and other technologies.
For clients in manufacturing sectors, we complete a range of factory/warehouse location and inspection services, property search and price comparison services, confirming the assets and existing liabilities of a factory, investigating quality control measures and workplace safety, legal and financial due diligence to determine if a factory or warehouse is properly zoned and in compliance with all the regulations of its district.
Developing Sales Platforms: China’s appetite for foreign brands, healthy food and other products that will increase living standards combined with the spending power of Chinese consumers offers an attractive market for foreign businesses. For example, “Singles Day” has become the largest physical retail and online shopping day in the world. Creating the right online and offline sales platforms when selling products in China is essential to success.
Direct Sales: When selling directly to distributors and other buyers in China it is important to enter into contracts with strong intellectual property protection clauses and clear mechanisms to recover if a deal does not work out as planned. Due to differences in cultures, time zones, business practices and a variety of other factors, closing a deal with a Chinese buyer can present obstacles which our lawyers are readily available to help market-entrants overcome. We often assist with contract negotiations and contract translations using both English and Chinese languages.
E-Commerce: To provide an overview of the leading online sales platforms, JD.com is China’s leading one-stop e-commerce platform which focuses on sourcing products directly from brands and suppliers and selling them directly to customers in China. Taobao is one of the largest online marketplaces in China and the merchants on Taobao are primarily individuals and small businesses. Tmall is China’s largest B2C e-commerce platform and this is often where international brands start selling in China. WeChat users can turn their individual accounts into platforms for e-commerce by using “Mini-Programs”. In addition, though most consumers do not buy directly from a retailer’s website, well designed websites are also important.
Cash and credit card use is rare in China since most consumers use digital payment systems such as Alibaba’s Alipay and Tencent’s WeChat Pay, enabling consumers to use mobile phones to make purchases online or nearly anywhere in China without having to own a wallet.
With many forever changing options available, market-entrants often hire local services providers to help narrow down which platforms are best for their businesses and to help create their marketing, social media and digital payment platforms. As such, we have established partnerships with information technology professionals so that we are able to provide a full range of services to market-entrants.