Posted by
melody
18 yrs ago
I am an Australian and want to buy a small hotel in Shanghai. It is currently Chinese owned and is a "you xian gong si" type business. As a foreigner:
1. can I buy it?
2. are there any special requirements because i'm a foreigner?
3. what is the tax payable on hotel gross profit?
would really appreciate any information.Thank you.
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1. can I buy it?
Yes, but there is a procedure to convert the company to a foreign invested enterprise. Alternatively, a new foreign invested enterprise can be set up and buy over the property.
2. are there any special requirements because I'm a foreigner?
Not that I know of.
3. what is the tax payable on hotel gross profit?
Corporate income on net profit.
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Thank you Douglaskoh. Very informative.
1. Do you know where i can read about this procedure?
2. The investment doesn't have to be over a certain amount?
3.Where can i find the corporate tax rates or is it flat %?
Also I heard some hotels have a choice of 2 tax structures. one is normal "Net" profit and the other is 10% of gross. Have you heard of this?
very much looking fwd to your reply. with best regards.Thank you
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That does not apply to fie. It only applies to local operators who have no proper accounts.
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Set up a HK shelf company and purchase the PRC domestic company provided it owns the hotel assets. This would involve conversion of the PRC domestic company to an FIE.
There are tax advantages in purchasing the company rather than the assets it owns.
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Thank you both Douglaskoh and RedBamboo. What tax advantages exist for purchasing the co. rather than its assets? Would it not work if i purchased the co. (which is Ltd Liability type)as an individual?
Also what is the company tax rate? Where can i find info on tax rate? Also how is capital gains dealt with here should i sell the business in the future (and make a gain!!)?
Some issues that came to light tonight is about an orange or green book and a stamp?? Does anyone know what they are??!
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Hi, I am a Chinese lawyer who specialize in helping foreigners to set up WOFE, rep office and Joint venture and operate mergers and accquistions. If you have any questions, Please feel free to contact me at lanyunzh@hotmail.com
Regards,
Julia
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Hi Tone-Dog,
In a lot areas , you shall be allowed up to more than 50%foreign ownership with a Chinese company.Even you can set up your own wholly-forein-owned companies. Only in some restricted business areas, you are required not to be allowed up to 50% foreign ownership.
Regards,Julia
lanyunzh@hotmail.com
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If you need a lawyer in Guangdong, I am at your service. My email is dkoh@rongzi.com.
There are more legal issues. Quite a number of Chinese companies do not have a clean title over some of their assets.
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