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Stone Compass Associates Brochure
- 1. Accountants & BusinessAdvisors www.stone-compass.com
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- 3. ABOUT US Stone CompassAssociates is a professional independent accounting and business driven consultancy that uses specialist resources to deliver integrated business solutions to companies in China. We provide a wide range of consulting, company formation and outsourcing services to organizations currently operating or looking to operate in China and Hong Kong. Our services are managed by an international and experience team of consultants and specialists who work at our Beijing and Shanghai office. We work and collaborate with our clients to develop the most appropriate and most practical solution for clients’ corporate structures and operations.
- 4. OUR TEAM The membersof our team are multilingual and combine many years of expertise in accounting, tax, business advisory, systems implementation, testing and more. Our cultural and professional diversity provides us with the flexibility and knowledge required to understand our clients’ needs and offer integrated service packages. Sharing our understanding and knowledge of both China and the West is one of our major principles for success. OUR APPROACH We adopt a very flexible approach in the we work with our client. We are committed to establishing a partnership that best fits a client’s needs. We always approach issues from a business perspective and provide practical solutions. Our client receives relevant, balanced advice with alternatives and options that able our clients to make the best decisions for their business. We can assist companies in their China projects regardless of which stage they are in – researching the business environment, entering the market or growing the business in China. OUR CLIENTS Our clients are small-to-medium sized privately owned companies, multinational corporations and subsidiaries of larger listed companies. We recognize that each customer has individual requirements and our objective is to provide an efficient and cost effective service tailored to their specific needs. The mission therefore is to develop a lasting relationship with our clients with a focus on protecting their investment and maximizing their returns from their activities in China and Hong Kong.
- 5. Stone Compass Associatesassists clients at all stages of their market entry and expansion in China and Hong Kong offering clients consulting, incorporation and outsourcing services. Whetheritisaone-timetransactionoranongoingbusinesswehavetheabilitytounderstand the client’s needs enabling them to focus on their core business functions without dealing with the legal, accounting, tax and administrative aspects of their company. SERVICES SERVICES
- 6. THE ONE-STOP “WHOLELIFE” SERVICE PROVIDER FOR YOUR BUSINESS NEEDS Stone Compass Associates provides customized one-stop services to its clients. Typical sets of services offered to clients throughout the company’s “whole life” cycle Accounting & payroll; Treasury & cash management; Corporate tax compliance; Transfer pricing; Individual income tax planning; Statutory audits Corporate formation; Corporate structuring; Corporate tax planning & structuring Market research & assessment; Market strategy; Business plans; Due diligence; Valuations Internal audit; Fraud investigation & prevention; Profit repatriation; corporate tax optimization; ERP & systems set up Due diligence; corporate governance, risk management; Special audit & review PRE-INCEPTION MARKET ENTRY OPERATIONS CONSOLIDATION GROWTH STRATEGY
- 7. ACCOUNTING AND PAYROLL Making soundbusiness decisions in a changing business environment demands accurate and reliable financial reporting. A proper and accurate accounting system is crucial to all businesses in order to maintain a healthy and transparent financial management. Hiring and retaining reliable finance staff in a developing market can be difficult. High staff turnover rates cause companies to suffer from skill gaps and shortages, which dramatically affects recently established companies and reflects on the quality and reliability of the of their financial statements. Stone Compass Associates provides management with total control over a company’s financial activities while ensuring quality supervision and compliance. By entrusting us with your accounting activities, you are freeing up you and your staff to focus exclusively on your core areas of expertise. BOOK KEEPING AND FINANCIAL ACCOUNTING Whilst many firms simply believe that account keeping is required to comply with PRC laws and regulations, at Stone Compass Associates we seek to add real value to your business through working closely with you to provide quality management accounting information. This is all the more apparent in China’s rapidly evolving system with changes in legislation and accounting standards. We are adept in providing outsource financial accounting and bookkeeping services to the small and medium size companies. ACCOUNTING
- 8. CFO FUNCTION As companiesfocus on developing core operations and business strategy in China, many of their internal departments, including finance are too small to generate critical mass or efficiencies. At the same time, many companies still require an experienced, senior professional to assist in developing strategy and liaise with the management team on the financial health of the company. Stone Compass Associates CFO services offer experience in this area and provide companies the flexibility of drawing upon this expertise when and as they require. Our personnel act in CFO positions across many industries and can assist in providing growth strategies and direction for your China operations. TREASURY AND CASH MANAGEMENT We offer treasury and fund management services and can provide cash processing and forecasting of payments. We ensure that the company funds are used following management guidelines and approval.
- 9. PAYROLL We provide payrollprocessing and HR administration services for companies with employees. By outsourcing the responsibility of this time-consuming processing work over to us, would allow you to focus on the more strategic and value-added issues that affect the business on a daily basis. Moreover, the companies can also focus on the more strategic issues affecting HR such as setting strategy, hiring good staff and monitoring staff performance. OUR FULL LIST OF SERVICES INCLUDE: TINGACCOUNTINGACOUNTINGACCOUNTING Book keeping and financial accounting Management reporting & evaluation Treasury and cash management CFO function Payroll Accounting policies & system set-up Hong Kong accounting
- 10. Effective compliance andopen, transparent reporting are the foundations of a successful and effective management of your tax situation. Tax strategies that align with the needs of the business are crucial to growth and good corporate governance. We can assist you with every aspect of setting up, maintaining and developing your business. This includes identifying opportunities for you and helping you establish an appropriate structure that will minimize your tax burden in an effective and legitimate way. Managing your tax obligations responsibly and proactively can make a critical and important difference. TAXATION TAXATION
- 11. Enterprise Income Tax(EIT) (more commonly known as Company Income Tax CIT), applicable to all foreign investment enterprises (FIEs) and local Chinese Domestic companies; and to non-resident foreign companies where a payment of interest, rental, royalty and other income is made Individual Income Tax (IIT), applicable to all expatriate staff working in China and local Chinese employees Business Tax (BT), applicable to businesses which have relevant transactions such as services. Value-Added Tax (VAT), applicable to businesses which have sales transactions Consumptions Tax Stamp Duty Urban Real Estate Tax Customs duties PRE-ENTRY TAX STRUCTURING WeadviseonthesuitabilityofacompanyinvestmententeringChinaonhowtobeststructure their investment. Developing tax optimization structures and transfer pricing policies in line with corporate international strategy and compliance with PRC tax regulations. TAX COMPLIANCE All registered companies must file tax declarations in a timely manner. We make sure that our clients comply with the regulations in their place of operation. Major taxes that require compliance include:
- 12. CROSS BORDER STRUCTURING Weprovide cross-border structuring and tax planning advice and offer tax consolidation services between China and Hong Kong. TAX PLANNING Whether this is at the individual or corporate level tax planning is a process of looking at various tax options to determine when, whether and how to conduct business and personal transactions so that taxes are eliminated or reduced. We provide payroll processing and HR administration services for companies with employees. Choosing the right tax planning strategies will reduce or avoid a higher tax burden than necessary. Stone Compass Associates can provide valuable tax planning advisory during different phases of your business in China. TRANSFER PRICING We can assist client to review and document their transfer pricing policies and the related business processes. These include comparative market analysis , transfer pricing schemes, contemporaneous documentation, advanced pricing agreements, cost sharing agreements, justifications of controlled foreign companies and dispute resolutions. TAXATION
- 13. China corporate taxplanning and compliance, including business tax, VAT and income tax Personal and individual income tax planning and compliance China taxation optimization, tax efficiency and tax planning Tax exemptions and resolving disputes with tax authorities Tax structuring during setting up of Wholly Foreign Owned Enterprises, joint ventures, and representative offices Transfer pricing review and documentation Profit repatriation strategies Tax due diligence Hong Kong taxation HONG KONG TAXATION Through our Hong Kong affiliate we are able to provide a full range of tax services which include profits tax, salaries tax, property tax, back duty, personal assessment, stamp duty, tax litigation and planning. As Hong Kong tax is basically under a territorial tax system which means that profits arising in or deriving from outside Hong Kong (off-shore profits) are tax free. Advice in this respect can be offered. For those clients who are operating their business internationally, advice can be offered regarding international tax planning through connections with other professional accountants worldwide.
- 14. Before anything, companiesshould always carry out a thorough research of the market. The habitual question amongst would-be investors is the type of business they should seek. The most direct way to penetrate the China market is to set up local presence. There are various forms of investment vehicles available to suit different business objectives and operations. We can assist you in identifying the business vehicle that is most suitable for you in order to accomplish your goals in China. The preferable option for you depends on your business sector, intended financial commitment, your overall company strategy and goals, latest regulations of the government authorities, your time-frame and other determinants. WE ASSIST YOU IN THE SET UP PROCESS OF ALL KINDS OF ENTITIES AVAILABLE TO FOREIGN INVENSTORS AND ARRANGE FOR: China Company registration with the relevant authorities Licenses, permits and approvals Contracts and agreements Advice on financing and funding in China CORPORATE ESTABLISHMENT CORPORATE
- 15. MERGERS AND ACQUISITIONS Whetheryour company is looking at acquisition targets, forming joint venture alliances or looking to ‘spin-off‘ non core business operations, Stone Compass Associates can assist to guide a client’s project from conception to execution. Through in-depth financial and non-financial analysis, we are able to work with clients to identifyandthenassessacquisitionandmergertargetsforbusinessfit,synergyoptimization and business development opportunities. We also help clients spot any discrepancies or potential issues that may face when try to merge or acquire the target company. MARKET ENTRY AND DEVELOPMENT STRATEGY Stone Compass Associates can assist many companies, across a wide range of industries, in developing and executing their entry into the China market by advising them on the right investment vehicle. Similarly, as the China market further develops and your company’s operations expand, we are able to offer strategic advice on how to best take advantage of the changing business environment and market conditions. STRUCTURE Stone Compass Associates can assist with cross-border contracts and transactions especially with Hong Kong. This includes assistance with the full tax implications, invoicing, service agreements ensuring business requirements are met safely and tax efficiently.
- 16. FINANCIAL DUE DILIGENCE StoneCompass Associates offers clients the assurance of complete “Business” due diligence, for both potential acquisition targets and also existing operations. We view companies in their entirety, including future financial projections, comprehensive SWOT analysis and non-financial factors such as corporate culture, management ability and internal processes. STONE COMPASS ASSOCIATES ADVISES AND ASSISTS CLIENTS IN SETTING UP THE FOLLOWING ENTITIES AND OPERATIONS IN MAIN- LAND CHINA AND HONG KONG (THROUGH OUR AFFILIATE): Representative Offices (RO) Foreign Invested Commercial Enterprises (FICE) Wholly Foreign Owned Enterprises (WFOE) Joint Ventures (JV) Hong Kong Holding and Trading Companies Offshore Companies CORPORATE
- 17. Companies can addvalue to their stakeholders by managing risk and control in an optimal manner. More businesses are establishing an internal audit function or engaging external system specialists to review the organizations’ internal control system to safeguard against financial and system risk. Demand for high quality internal audit services has therefore grown exponentially as the global awareness of the importance of good corporate governance, effective risk management and appropriate internal controls continue to grow. Stone Compass Associates is committed to assist and provide support to organizations to implement and maintain effective internal control systems and procedures We can support clients in the review of their existing mode of business operation and suggests alternative systems to streamline operations, increase efficiency and/or reduce overhead costs. CORPORATE GOVERNANCE AND INTERNAL AUDIT As China’s markets continue to develop, corporate governance has increasingly been a topic of discussion for foreign investors and Chinese market participants alike. Effectivecorporategovernancemaynotonlyaffectthemarketvalueofindividualcompanies, but it can also impact the development of the capital markets as a whole. Stone Compass Associates can perform an internal auditing exercise designed to add value and improve an organization’s operations. By helping an organization to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. SYSTEMS, PROCESSES & ASSURANCE SPA
- 18. WE CAN EVALUATERISK EXPOSURES RELATING TO THE ORGANIZA- TION’S GOVERNANCE, OPERATIONS AND INFORMATION SYSTEMS, IN RELATION TO: RISK MANAGEMENT AND COMPLIANCE Currently more and more security markets establish strict monitoring regulations and laws, such as US SOX 404 compliance and Japan SOX compliance. Stone Compass Associates can assist the management to be familiar with the requirements of the law/regulations. China Security Authority issued an internal control framework in June 2008. The framework will be applicable to ALL China private companies, foreign invested companies and listed companies. Since July 2009, the framework will be effective to ALL China listed companies. Similar with US SOX act or Japan SOX, China Enterprise Internal Control Framework requires the enterprises build up appropriate control system to enhance the reliability of financial statements, and protect the rights of the investors and stakeholders. We can assist companies to fulfill this requirement by developing a set of methodologies to meet the regulatory regulations. Effectiveness and efficiency of operations Reliability and integrity of financial and operational information Safeguarding of assets Compliance with laws, regulations, and contracts
- 19. REVIEWOFINTERNALCONTROLANDACCOUNTING PROCEDURES We can assistto drive efficiencies through streamlining information flows and eliminating redundant internal processes. By adopting these changes and re-evaluating current operations, organizations are able to enhance cost competitiveness and further develop market share SYSTEM IMPLEMENTATION With information systems now playing such a pivotal role in providing crucial management information, it is imperative for organizations to choose the most appropriate financial, HR and accounting solutions. At Stone Compass Associates we can assist in choosing and developing a system to suit your company’s size, needs and budget. OUR SERVICES CAN BE CLASSIFIED INTO THE FOLLOWING MAJOR CATEGORIES: SPA Corporate governance and internal audit Risk management and compliance Review of internal control and accounting procedures System implementation
- 20. Through our affiliatedCPA firm we provide annual statutory audits under both PRC GAAP and international accounting standards; non-statutory audits; special purpose audits and financial due diligence. STATUTORY AUDIT The Chinese law requires that all foreign investment enterprises (FIE) including WFOE’s and Joint Ventures to be audited annually by a registered CPA. The main purpose of the statutory audit with the exception of meeting the needs of investors is to facilitate the annual examination with various government departments. The filing deadlines set by the departments vary from 30 April to 30 June. NON STATUTORY AUDIT Companies do not require statutory audits if they meet the requirements for exemption of if they are incorporated in jurisdictions where statutory audits are not required. Certain of these companies may still wish to have their accounts audited. For example the shareholders or the board of directors may request for audited accounts or the availability of annual accounts may be a condition stipulated in the shareholders agreement. SPECIAL PURPOSE AUDIT Shareholders, the board of directors or management may sometimes request for an audit or special investigation of the company or specific areas in the company if they have reasons to suspect that the accounting and other records of the company do not properly reflect the transactions and financial status of the company. AUDIT & REVIEW AUDIT
- 21. IFRS / USGAAPAUDIT AND CONVERSION We are able to provide IFRS conversion services and audits to those foreign investment enterprises (FIE) in China for group consolidation purpose or for the ease of understanding of their foreign investors. For the group consolidation, our affiliated Stone Compass Associates CPA will follow audit instructions from the group auditor. We can also provide reporting services for those countries that have not adopted the IFRS accounting standard. For example, a US invested companies will want to have a conversion and audit service along with the Chinese statutory audit. CAPITAL VERIFICATION According to Chinese Laws, paid-in capital of all companies including foreign investment enterprisesshallbeverifiedbyaCPA,whoissuesacapitalverificationreportuponcompletion ofallverificationprocedures.Thisappliestocircumstancesofinitialcorporateestablishment, increasing or decreasing registered capital; change of investors (shareholders) and in a merger and acquisition.
- 22. FINANCIAL DUE DILIGENCE Duediligence plays a very important role in merger and acquisition (M&A) transactions. It helps acquiring or investing organization understand everything possible about the target company. It is a critical step in determining whether a deal or project is worth doing. A due diligence investigation is also helpful in other circumstances such as when a company is interested in finding out more before entering into partnership with another company or when a manufacturer looks for an ideal supplier who can meet as many his or her requirements as possible. We can perform a financial due diligence that analyses, qualitatively and quantitatively how the target has performed financially to get a sense of earnings on a normalized basis. This also includes assessing whether or not the target company’s projections or anticipated performance is reasonable, objective and achievable by looking at and analyzing its past. FRAUD PREVENTION AND INVESTIGATION If the management of a company has reasons to suspect that the accounting does not properly reflect the financial status of the company or if there are reasons to believe assets are being misappropriated then a thorough investigation or forensic accounting can be conducted. Indeed, it is much better to prevent this from happening from the first place by putting in good risk control measures and internal controls. THE FULL LIST OF SERVICES INCLUDES: AUDIT Statutory audit Non statutory audit Special purpose audit IFRS / USGAAP audit and conversion Capital verification Financial due diligence Fraud prevention and investigation
- 23. Performance of duediligence Assistance of tax structure or planning of the group and/or companies before or after the transactions Appraisal and valuation of target company Advisory on assistance with local regulatory issues including government bureaus We are able to offer scalable business services to those clients who wish to establish a physical operation in China. This service is often of particular importance for clients who need assistance with local laws, business practices and cultural idiosyncrasies and who basically need a helping hand in getting a new venture off the ground. MERGER AND ACQUISITION We are able to assist investors wishing to acquire a company, business and/or assets in China from conception to execution. Through in-depth financial and non-financial analysis, Stone Compass Associates is able to work with clients to identify and then assess acquisition and merger targets for business fit, synergy optimization and business development opportunities. We are also able to work closely with accredited PRC valuers to determine company valuations; lawyers and bankers. BUSINESS ADVISORY ADVISORY
- 24. Administration of cashfunds deposited with us or in your own bank accounts Cash forecasting and processing of accounts receivables Account signatory services to arrange settlement of the company’s obligations to suppliers, payroll, employee expense reimbursements and other fund transfers Advising on capital raising options Assistance in mergers and acquisitions Capital structure analysis Budgeting and forecasting Cash flow management Investigating debtors Advising on reorganization of company finance functions and improvement of financial management FINANCIAL MANAGEMENT Companiesfacemoreandmorefinancialchallengesandopportunitiesfrombothinsideand outside of businesses. Stone Compass Associates can provide advisory and assistance to help organizations solve their problems, improve their financial management and reach their strategic objectives: CASH, FUND AND PAYMENT ADMINISTRATION We can assist with cash, fund and payment administration services. For smaller businesses where segregation of duties is an issue, our service can act as an additional internal control to be exercised over the company’s funds.
- 25. LIQUIDATION, DISSOLUTION ANDCESSATION OF BUSINESS We offer expertise in the dissolution of companies. These services can include the withdrawal of registration, arranging dormancy of legal entities and cessation of business. STONE COMPASS ASSOCIATES ADVISES AND ASSISTS CLIENTS IN THE FOLLOWING BUSINESS ADVISORY: ADVISORY Standing in the liquidation committee Performing liquidation audits Advising on equity or asset transfer Assisting in the tax audit by the tax bureau Performing tax clearance procedures Closing bank accounts De-registering with relevant Chinese bureaus Merger and acquisition Business valuations Financial management Business plans Cash, fund and payment administration HR consulting including planning and structuring employment contracts and individual income tax Foreign exchange registration and overseas payments Liquidation, dissolution and cessation of business
- 26. OUR OFFICES www.stone-compass.com GENERAL EMAIL [email protected] BEIJING Room 821 XinZhong Building No. 2 Xinzhong West Street Dongcheng District Beijing 100027 China Tel +86 10 6551 8656 Ext. 8212 Fax +86 10 6416 4168 HONG KONG Unit 603 6F Chow Sang Sang Building 229 Nathan Road Kowloon Hong Kong Tel: +852 2834 3752 Fax: +852 8143 0153 SHANGHAI 2nd Floor No. 668 Huai An Road Jingan District Shanghai 200041 China Tel +86 21 6083 1155 Fax +86 21 6856 9789 Fax +86 21 6083 1158
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