Beneficial ownership concept: how it could affect your business in Russia

An article by Brand and Partner

Nearly every Russian company belonging to a multinational group of companies has inter-company or cross-border arrangements which might be especially attractive due to applicable double taxation treaty (DTT) incentives allowing reduced withholding tax rates or taxation only in the country of the recipient of such income. Russian companies may also pay out dividends subject to participation exemptions provided in the DTTs. In order to apply such DTT incentives, a foreign recipient should provide a Russian company with the certificates of tax residency and, starting from 2017, with confirmation of the recipient’s actual right to such income.

Read the complete article here. 

India Briefing is produced by Dezan Shira & Associates

The income tax forms require individuals and businesses to disclose details of their income, professional as well as residential status. 

Assessees who earn a taxable income must declare their total income earned by filing an income tax return (ITR) form. For FY 2018-19, the Central Board of Direct Taxes (CBDT) has introduced new ITR forms that have increased reporting requirements and seek more details of the taxpayer with respect to income, profession, and residential status.

The last date for filing income tax returns for FY 2018-19 is August 31, 2019.

Read the complete article here. 

SOTM by africon

In late 2018, africon conducted a project on the independent aftermarket (IAM) for commercial vehicles in South Africa. The target of the project was to identify potential partners that are not only suitable, but also themselves interested to take up business with the client. Along the way, we scanned partners of most of Europe´s big aftermarket suppliers, from ZF, Mahle to Mann+Hummel and others.

Read the complete article here. 

India Briefing is produced by Dezan Shira & Associates

Last week, the parliament of India passed the Code on Wages Bill, 2019 (“the Bill”). The Bill will enable the federal government to fix minimum statutory wage for millions of workers.

The Bill is the first in the series of four labor codes that the government is working on to rationalize its 44 labor laws and improve the ease of doing business in the country.

The Bill seeks to subsume relevant provisions of the previous laws pertaining to workers’ wages, equal remuneration for men and women, its payment and bonus. The other three codes will deal with social security, industrial safety and welfare, and industrial relations.

Read the complete article here.

An article by Christian Tegethoff, Managing Director, CT Executive Search for The Hunt Report

Not only the large German corporations, but also many mid-sized German companies are well experienced with working on foreign markets. This is especially true in the German B2B sector, where practically all companies operate international supply chains and export their products to distant places like China, Russia or the USA.

India with its growing economy is becoming more and more attractive especially for German manufacturers from the machine-building, automotive and pharmaceutical industries.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Companies recruiting employees directly in China need to understand key aspects of the country’s labor and contract laws, rules, and regulations. Here we answer simple questions about the recruitment process and discuss the types of labor contracts in China.

In principle, any company located anywhere in the world may employ a Chinese person to physically work in China.

However, the employment contract will not be regulated by relevant Chinese legislation unless it is entered into via an invested entity on the Chinese mainland, or under circumstances where the overseas company is regarded as a permanent establishment in China.

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

Foreign employers that want to attract and retain the best talent need to ensure they understand payroll in Vietnam and coordinate salary structures with HR management. Here, Vietnam Briefing explains the payroll basics and some best practices for employers in the country.

In recent years, foreign direct investment (FDI) flows into Vietnam have been on the rise as greater numbers of foreign companies decide to establish businesses in the country. Employers, however, need to develop a good understanding how human resources work in the country. For many, salary structures are usually a beginning point, particularly as it rationalizes wages and motivates staff.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Foreigners can participate in China’s social insurance scheme. China Briefing explains how foreigners can claim their social insurance payments when they leave the country.

Foreigners (including residents from Taiwan, Macau, and Hong Kong) working in China have been required to participate in the country’s social security system starting from 2011, according to the Interim Measures for Social Insurance System Coverage of Foreigners Working within the Territory of China (Interim Measures), released by the Ministry of Human Resources and Social Security (MOHRSS).

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

Vietnam has specific regulations on maternity leave that are unique to the country. Overall, Vietnam’s maternity laws are employee friendly and are set in place to ensure that employees are protected during and after child-bearing. A solid understanding of the law is needed for foreign-invested enterprises to plan effectively within the country.

In May 2013, Vietnam increased the duration of maternity leave for female employees to six months as opposed to four months of maternity leave earlier.

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An interview with Christian Tegethoff Managing Director, CT Executive Search

How do you identify suitable candidates on the highly competitive East European markets?

The Eastern European HR markets are indeed particularly tense in the production-related management sector. Recruiting Managing Directors, Plant Managers and other executive positions in East Central Europe therefore requires a thorough approach.

Job postings have a poor chance of succeeding in such an environment. By contrast, the direct search approach ensures that the best candidates in the market become available.

Read the complete interview here. 

An interview with Thomas Ilkow, Managing Director, with responsibility for Eastern Europe and the Middle East, Bosch Rexroth

How does Bosch Rexroth operate in Eastern Europe?

Bosch Rexroth operates in ten sales areas worldwide. My region is geographically the largest area with 42 countries, stretching from Karlovy Vary to Kamchatka and from Riga to Abu Dhabi. We are differently positioned in all countries. We operate distribution companies in Russia, Poland, Hungary, the Czech Republic, Turkey and Romania; service points and customizing centres complete the presence in these countries.

Read the complete interview here.

An interview with René Harun, Managing Director, AHK Services s.r.o., a subsidiary of the German-Czech Chamber of Commerce and Industry (AHK)

How many German companies are active in the Czech Republic today?

How many of these manufacture in the country? According to our information, there are about 4,000 companies with German equity participation in the Czech Republic, of which about half are manufacturing in the country. This is a considerable amount, especially compared to the size and importance of other countries, such as Russia or China.

Read the complete interview here. 

India Briefing is produced by Dezan Shira & Associates

The last date for filing income tax returns in India for the financial year (FY) 2018-19 (and assessment year 2019-20) is July 31, 2019. 

Filing of ITR is a mandatory obligation where tax payers detail their annual income from salary and other sources, allowances and reliefs claimed, and investments.  

In addition to the tax and surcharge, the government levies health and education cess at 4 percent on the total tax computed.

Read the complete article here. 

India Briefing is produced by Dezan Shira & Associates

Karnataka Shops and Establishment Act registration is a mandatory requirement for all companies, persons, and legal entities planning to set up a shop or commercial establishment in the state.

The Act is an important document for employers and their human resources (HR) departments in the state. The Act regulates commercial establishments in areas such as working hours prescribed for employees, annual leaves with wages, wages and compensation, employment of women and children, and other aspects.  

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

For foreigners working in Vietnam, determining the applicability of personal income tax (PIT) involves decoding a number of rules. Following this, foreign workers need to calculate their precise liability and any applicable deductions.

Consulting with an in-country tax specialist can help individuals’ optimize their tax exposure, while employers’ may be able to identify more competitive salary packages with an advisor. Below we introduce the basics of PIT, before explaining tax-exempt incomes (employment benefits that are not subject to PIT) and tax reductions for dependents.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Looking to restore the confidence of foreign investors, China passed a new Foreign Investment Law in March this year.

The law establishes a new framework to govern foreign investment in China and addresses a number of common concerns among overseas businesses. 

Critics, however, have questioned the extent to which the law addresses these issues in practice, pointing to the law’s at times broad and vague language.

To make sense of the changes, this issue of China Briefing magazine offers a comprehensive analysis of China’s new Foreign Investment Law.

Read the complete briefing here. 

China Briefing is produced by Dezan Shira & Associates

When a business decides to relocate, and picks a site after careful analysis and comparison, the next step is to develop a suitable relocation strategy on the operational level. This entails a number of regulatory formalities and compliance issues that a business needs to treat carefully ahead of the relocation, namely in regards to legal, tax, and human resource (HR) considerations.

HR considerations

Based on the relocation strategy adopted by the company, current employees could be managed in different ways. A company may want to continue the employment relationship to save the hassle of recruitment during same city relocation, which is generally achieved by providing necessary support for new commutes, and amending labor contracts.

Read the complete article here. 

SOTM by africon

Overall, the aluminium profiles market in Ghana has a pyramid shape, with a large budget and a relatively smaller but still significant premium segment. As for other building materials, especially the premium segment holds interesting opportunities for firms from Europe and elsewhere.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Over-reliance on tax as an incentive 

Hong Kong’s taxes are still low (the profits tax is 16.5 percent); however, taxes are coming down in the Asian region anyway. Selling a low tax jurisdiction is not enough to make Hong Kong attractive. An example of this is the low individual income tax offered to attract foreign talent into nine mainland cities in the Greater Bay Area.

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

Vietnam’s Law on Competition came into effect on July 1, 2019, replacing the 2004 version of the law. In June 2018, Vietnam passed the new regulation, which focuses on competition restraining agreements, market dominance, economic concentration, and unfair practices.

Scope of the law

The new law has expanded its scope and now includes both Vietnamese and foreign companies and individuals in case their actions have – or potentially have – a competition restriction impact on the domestic market. A competition restriction impact is an influence that will exclude, reduce, or hinder competition in the market.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Eligible overseas talents working in nine cities in the region can enjoy a preferential tax rate of 15 percent – in line with the Hong Kong IIT rate. China Briefing explains the policy introduced.

To support the smooth implementation of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) plan and attract overseas talents to work in this region, China has rolled out measures to grant subsidies to overseas high-end and critically-lacking talents (including Hong Kong, Macau, and Taiwanese residents or “HKMT residents”).

Read the complete article here. 

Interview with Christian Tegethoff, Managing Director, CT Executive Search

How do the Russia sanctions affect your work concretely?

Executive Search is not directly affected by Western or Russian sanctions. However, we do feel the effects indirectly.

Particularly smaller European companies are uncertain about the risks of exposure to the Russian market. It certainly seems that companies tend to leave opportunities unused because they engage in other markets instead of in Russia.

Read the complete interview here. 

An interview with Jens-Uwe Klemens, Managing Director, Quarzwerke GmbH

How does the Russian business go in times of sanctions and import substitution?

All in all, our sites are currently well utilized. We mainly sell to the glass industry and foundries. Interesting target industries are the construction materials sector and the plastics industry. In the last two years, demand has improved. We are even considering expanding our production capacity.

However, the market prices our raw materials are at a level that makes long-term asset preservation difficult. The prices would have to be significantly higher for necessary investments in products of high quality.

Read the complete interview here. 

An interview with Stephan Schulte, Managing Director of the Russian subsidiary of Symrise AG

How is Symrise‘s business in Russia affected by the sanctions?

Our products are not subject to any Western sanctions, but to the Russian on agricultural products, which incidentally also include salt.

We used to import our raw materials from Europe and the United States, but this is no longer possible. Today we buy globally or, if possible, locally. This is not easy, because many suppliers do not provide the quality we require or the processing levels needed.

Read the complete interview here. 

India Briefing is produced by Dezan Shira & Associates

In India, regulations on foreign currency exchange are quite strict. Individuals and businesses transferring money outside India often run into issues with the tax and regulatory authorities. To avoid any legal implications, it is essential for individuals and businesses to be aware of the regulations while making any foreign currency transfer or remittances.

The Reserve Bank of India (RBI) is the regulator of foreign exchange dealings in India. It prohibits, restricts, and regulates the opening, holding and maintaining of foreign currency accounts, and the limits up to which a person resident in India can hold the amount in such accounts.

Read the complete article here.