Doing business in China requires a solid strategy which includes not only conducting business itself, but also having efficient holding structures and investment plan. These holding structures do not need to be placed only in investor’s home country but can use advantages of business and legal environment of another countries or so called “third” jurisdictions.
Hong Kong, Singapore or other jurisdictions are often used for entrance to Chinese market. Building additional layer in a holding structure is no longer domain of multinational enterprises, and even small and medium-sized companies may consider such strategy, and place part of their holding structure in the third jurisdiction, or use it as a “stop” for their products on the way to Chinese market, or as a base from where they provide services to customers in China. However it is absolutely essential to evaluate and consider for what type of investment or exportation this “additional layer” is beneficial.
In this report we will be analysing the advantages and disadvantages of utilizing third jurisdictions when investing in or exporting to Mainland China with a primary focus on Hong Kong as a natural gateway there.