Issues Affecting Cross-Border Mergers and Acquisitions in China

Along with the rapid development of China's economy in recent years, there has also been an increase in inbound and outbound investments by both domestic and foreign investors, as well as corporate restructuring transactions to improve the operational efficiencies of these investments. kashgar border transfer special purpose vehicle  was the most common structure used by foreign companies to hold direct investments in China. An SPV is a holding company set up by a foreign investor outside of China – usually in Hong Kong or other locations that boast notable tax advantages and favorable tax treaties with China – for the special purpose of holding equity interest in an onshore foreign-invested enterprise One of the advantages of using an SPV is that it may benefit from preferential withholding tax rates on dividends and other passive income under the tax treaties between China and the jurisdiction in which the SPV is located.

For example, Hong Kong's double tax agreement with China reduces the withholding tax rate on dividends from 10 percent to 5 percent. In addition, the jurisdiction in which the SPV is located usually imposes low, or even zero, capital gains taxes on income from equity transfers. When the foreign investor disposes of the investment in China by transferring equity in the SPV , the transfer is also technically exempt from capital gains taxes in China since both the seller and subject matter are located offshore.A general anti-avoidance rule was first introduced in China under the CIT Law which came into effect in 2008. silk road group tour GAAR empowers Chinese tax authorities to make reasonable adjustments where an enterprise implements an arrangement without reasonable business purposes in order to reduce its taxable income or profit. The CIT Law's Implementing Rules provide that “an arrangement without reasonable business purpose” refers to an arrangement which has the main purpose of obtaining tax benefits such as the reduction, elimination, or deferral of tax payments.

Most Chinese cities hiding vital pollution data from public

Most city governments on the mainland withheld vital information on pollution from the public last year, with many scaling back their disclosure to protect polluters as economic growth slowed, two major environmental organisations said in a study released in Beijing yesterday.The 10 most secretive cities were Zaozhuang in Shandong , Datong and Yangquan in Shanxi, Xiangyang in Hubei , Karamay in Xinjiang, Changchun and Jilin city in Jilin, Zhangjiajie in Hunan , Jinzhou in Liaoning and Ordos in Inner Mongolia. They disclosed barely any environmental information, such as the amounts of pollutants discharged or the identities of major polluters.Datong and Yangquan are among China's largest coal and power production centres and were responsible for much of the smog that shrouded many parts of northern China in recent months. Jilin, Changchun and Jinzhou, in the northeast, are centres of heavy industry.The Institute of Public and Environmental Affairs in Beijing and the Natural Resources Defence Council in the United States have been monitoring the environmental transparency of 113 major mainland cities since 2009, releasing an annual pollution information transparency index.The researchers said they had grown used to the persistent lack of transparency in mining and industrial centres over the years, but had been surprised this time by the large number of cities that took big steps backwards.

Forty cities scaled back their information disclosure last year, with Wuhu in Anhui, Foshan and Shantou in Guangdong, Baoding in Hebei, Taizhou in Zhejiang, Changzhou in Jiangsu , Anshan and Dalian in Liaoning, Weifang in Shandong and Yinchuan in Ningxia the most regressive. Wuhu's index score was only 34.6 last year, down from a respectable 57.1 in 2011.Institute of Public and Environmental Affairs director Ma Jun said it was an alarming development."This is totally new to us," he said. "We have never seen so many cities, about 35 per cent of the total, stepping backwards."They have significantly slowed down after promising progress on transparency in recent years."A key reason for the increase in secrecy was local protectionism, the report said, with some city governments choosing to sacrifice the environment in their blind pursuit of economic growth.Apart from a few exceptions, such as Ningbo in Zhejiang, Dongguan and Shenzhen in Guangdong and Qingdao in Shandong, most mainland cities refused to disclose some of the most important and basic information about pollution and polluters, such as pollutant discharge data and records of administrative punishments handed out to polluters, the report said.

Lessons in taking good care

Teaching young to guard health of their families in Xinjiang Uygur region Marjorie Yang can still remember the shock she had when finding out that the most expensive medicine in a public health center at a small town in Xinjiang Uygur autonomous region was ice. "This means that the people living there almost had no medicine at all, which is beyond imagination," china tour packages.As chairman of Esquel Group, a leading Hong Kong-based textile and apparel manufacturer with operations throughout the world, Yang went to Xinjiang with the Jiankangkuaiche project, which literally means Health Express, a program launched by Esquel Group and Swiss pharmaceutical maker Novartis International AG in 2010 with the aim of improving the medical treatment and health of people living in Xinjiang, especially those in rural areas.The program consists of three elements - health-education for primary and middle school students, medical training about infectious diseases for physicians and support for the research of epidemic diseases related to Brucella, a potentially fatal parasitic bacteria.In order to carry out the health education project more effectively, the two companies have worked together to recruit health education training specialists from local residents. So far they have developed 24 full-time specialists as health educators, all of whom are from ethnic groups. The textbooks are written in Chinese and the Uygur language.Students can take classes in the psychology of adolescence and physical health and then become guardians of health in their families.

"The health education project can create extended beneficial effects on the families of the children who receive our lessons on health because the adults' access to knowledge about health is rather limited and, for some of them, knowledge of Mandarin is not great," said Helen Chui, president of Novartis Group (China)."My father used to smoke a lot and, after I learned from the class that smoking can lead to cancer, I told him immediately. He was quite shocked at this and finally made up his mind to quit smoking," said a girl named Guli.The poor roads and lack of infrastructure in the rural areas of Xinjiang made it a lot harder for health education teachers to carry out their work."The furthest school is about 80 kilometers away from the downtown area and we have to take several buses, a three-wheeled bicycle and even walk a few minutes to get there," said local resident Aliye Kurban.Several times she burst into tears when she got lost and could not find the school.Despite the work being arduous and painstaking, she doesn't regret her choice. "I feel that what I'm doing now is really something of significance to my hometown," said the young mother whose baby is only 1 year old.Speaking of the difficulty in promoting the program in Xinjiang, kashgar border transfer Yang said: "It is the process of learning the culture, history, social customs and religious faiths of local people that takes a lot of effort but is quite indispensable."Understanding local people's culture and lifestyles helps the program run more smoothly. By the end of December 2012 more than 400,000 students and 10,900 adults had benefited from the program."Under the poor medical circumstances, the first thing people can do is to strengthen their physical health by themselves. Education is what helps to make this happen," said Yang.Providing medical training about infectious diseases to doctors is another aspect of the Health Express program, also known as the Spring Rain project.

Cathay Pacific Profit Beats Estimates as Travel Demand Gains

Cathay Pacific Airways Ltd. (293), Asia's biggest international carrier, reported annual profit that beat analyst estimates after higher passenger numbers helped mask a drop in cargo traffic.Net income in 2012 was HK$916 million ($118 million), compared with HK$5.5 billion a year earlier, the company said in a Hong Kong stock exchange filing today. The city-based carrier was expected to make a profit of HK$538.7 million based on the average of 19 analyst estimates compiled by Bloomberg. Sales increased 1 percent to HK$99.4 billion, it said.Chief Executive Officer John Slosar's introduction of promotional fares helped boost passenger numbers 5 percent last year while Wall Street's job cuts weighed down on premium travel. With the rise in jet fuel prices, Cathay cut costs and is paring capacity this year as Middle East carriers such as Emirates increase competition by expanding into Asia-Pacific.
"Peak seasons of summer and Christmas holidays in the second half helped boost demand,"Geoffrey Cheng, an analyst at Bank of Communications Co., said before the announcement. "Cathay is likely to see a recovery this year, especially on the long-haul travel market, as the U.S. economy is improving."The airline's shares fell 0.7 percent to HK$14.16 as of the noon trading break in Hong Kong. The stock has declined 0.4 percent this year.Cathay posted a surprise first-half loss of HK$935 million, weighed down by slower cargo demand and losses from affiliates.Singapore Airlines Ltd. (SIA), the biggest carrier in Southeast Asia, last month reported profit that missed estimates for a fifth consecutive quarter as competition pushed down fares."We have taken the right measures to deal with current challenges and will take whatever further measures are necessary should the business environment not improve," Cathay Chairman Christopher Pratt said in the statement. "The cost of fuel remains the biggest challenge."Passenger yield, including fuel surcharges, rose 1.2 percent to 67.3 Hong Kong cents last year and the airline, according to the statement. Cathay and its Hong Kong Dragon Airlines Ltd. unit filled on average 80.1 percent of its seats little changed from 80.4 percent a year earlier, according to the statement.Slosar told staff in November the carrier was facing a "very challenging year" in 2012. Cathay has said it will cut passenger capacity 1.6 percent this year to cope with slowing international travel demand. In December, Slosar said the capacity reductions are intended to accelerate replacement of the oldest Boeing Co. (BA) 747 planes.

Duluth couple shares passion for wine, travel

This is a love story. David Devere and Sara Duke are world travelers from Duluth who fell in love with France after taking a canal boat trip there in 2011.On the way, the couple also fell in love with the world of wine.The result is a new business venture, Savvy Nomad Wine Tasting & Tours, which offers wine education and also guided tours in France for a close-up look at where that wine is made.Devere and Duke met in Antarctica working at the U.S. research station in the 1990s. Duke grew up near Two Harbors. Devere is from Arizona. They have since traveled all over the world. They called the France vacation the best they have ever taken. When they returned to Duluth, they decided they wanted to continue teaching people about wine as a business and to guide them on similar trips to France.
"We were driving across North Dakota," Devere said of the couple's first discussion about the new venture. They talked about educating people in Duluth about wine and then came up with the idea of actually taking people to the places it came from."It seemed like a natural progression," Devere said.The result has been several sets of wine classes at area businesses since last fall and a regular Wednesday night wine presentation at Chester Creek Cafe.The couple is going to France again this summer — leading two canal boat trips — and are taking reservations for more trips in September 2014.The wine and travel guiding venture is added to the duties of running the small press publishing company On-Word Bound Books since 2003.
In early spring of 2010, Devere came across an article in a sailing magazine advertising a canal boat trip in France. He showed it to Duke, who agreed the trip sounded wonderful. They recruited a couple friends to join them for a fall of 2011 trip, and David set about making the plans. He reserved the boat, picked flights, bought train tickets in France, planned a few days in Paris, and found hotels for the beginning and end of the trip.And then there was the wine. Devere wanted to have a better grasp of the wine made in the regions they would visit in France, so he purchased a DVD set called "The Everyday Guide to Wine." It offered 24 lessons using six bottles of wine for each one.Knowing that going through the lessons would prove to be an expensive venture, the couple recruited friends into a wine group to help share the cost of the bottles they would try.The group met about every other week for almost a year before the trip to France.

How to Become a Travel Agent

Change is under way in the travel industry. Brick-and-mortar storefronts are becoming relics as independent consultants replace traditional travel agencies. You can thrive in this new home-based world. Knowledge, expertise and research are key. But ultimately, it's about service – at both ends of the travel dollar.How spoke with Dan Smith, the Pacific Northwest Chapter director of the National Association of Career Travel Agents, about selling travel packages, getting credentialed, finding customers and working from home.Maybe someone has a great circle of relationships and people are always coming to them and they say, "Why shouldn't I get paid for doing all this research? I like doing it, but I could be making money." A lot of people get into their 50s and say, "You know maybe I'll just start this as a part-time thing." Some are very successful at it. They can balance more than one life simultaneously. … If you have a family reunion and you have an affinity with travel, you will start talking to hotels, you will talk to airlines, resorts, maybe transportation systems.
There are some travel schools out there. I don't think that's a good place to get training necessarily. That's how a lot of people have started, but then they were able to go into a brick-and-mortar and file brochures, write tickets. There are few places to do that these days because so many brick-and-mortars are no longer available. "When I left the airline, I thought I knew travel. I knew nothing about travel," Smith said. "I knew how to get people on and off airplanes. It's a totally different world."It's learning about a place and being effective in communicating about the place. … I have a wholesale business, which means a customer and/or another travel agent will call me and say, "What do you know about Costa Rica?"
I have a guy I work with in Costa Rica. I send him a profile and budget. Here's the time frames, what the clients are thinking of doing. He will come back with an itinerary.Then I go back to the client and say, "Here is what we can do." … Part of the reason it works is because I am doing the boutique smaller properties, as opposed to the mega-properties.And when you are going to destinations, people aren't looking for the brass and glass. They want to experience a place. So I'm on both sides of the street. I am a seller and I am also a resource to the other travel agents. Then I turn around and say to somebody else, "I need information on how to get a ground operator in Naples that's not going to take advantage of people." … That's part of how we interact and support each other.

March snowstorm could snarl travel across Midwest

A late-winter storm was expected to gum up travel Tuesday as it crept slowly across the Central and Midwest U.S. before heading east later in the week, forecasters said Monday.The storm was expected to peter out by the time it hits New York and Boston later in the week, but not before it creates a mess for commuters from Upper Mississippi and Ohio River valleys eastward to the Atlantic Coast.Significant snowfall will make travel dangerous Monday night and Tuesday in the Upper Midwest, especially around major cities like Minneapolis, Indianapolis and Chicago. The Weather Channel warned that major delays were likely Tuesday at O'Hare and Midway airports.Chicago is expected to get its biggest snowfall of the season — as much as 10 inches by Tuesday evening. The National Weather Service said accumulation rates of one to two inches an hour beginning Tuesday morning would make "snow removal difficult and travel extremely dangerous."
"Consider only traveling if in an emergency," it said in issuing a winter storm warning for the city.Unseasonably warm temperatures Monday melted some of the winter's snow in the Twin Cities of Minneapolis and St. Paul — just in time for a new blast of winter that could drop as much as 7 inches of new snow overnight and Tuesday."I'm tired of being ready for winter. I am ready for it be spring," Barbara Eckley of Minneapolis told NBC station KARE.By Wednesday, significant accumulations were forecast for the Washington area. Major flight delays are possible at Washington-Dulles, Reagan National and possibly Baltimore-Washington International airports.
While the storm isn't yet expected to hit the Northeast hard — forecasters said they'd have a better picture later in the week — the travel delays could have a noticeable ripple effect Wednesday in Philadelphia, New York and Boston.The system has meandered across the country since it formed off the West Coast last week. It was dropping heavy snow Monday on an area stretching from northeast Montana through parts of North Dakota and Minnesota and into eastern Iowa.A foot of snow had already fallen in parts of eastern North Dakota by noon Monday, NBC station KVLY of Fargo reported. Snow-covered passing lanes and reduced visibility were expected to remain a problem into Tuesday.At least 38 traffic accidents were reported in Black Hawk County in central Iowa by 6:30 a.m., NBC station KWWL of Waterloo reported. Six to 10 more inches are possible in the region by Tuesday morning.