China Desk

Fuelled by huge market potential and opportunity to expand customer and product base, businesses around the world is now eyeing to have a share of the China pie, the next up and coming power economy.

According to PwC’s 18th Global CEO survey 2015, 34% of the global CEOs, consider that China is the most important for their overall growth prospects over the next 12 months. In China, GDP growth has slowed somewhat – but it remains high relative to most other economies. The country clearly continues to be seen as a powerful global growth engine: CEOs are in no doubt that, when it comes to the most important overseas markets, it’s still a two-horse race between the US and China. The IMF now estimates China’s GDP to be bigger than that of the US, in Purchasing Power Parity (PPP) terms. And we think China will overtake both the US and the EU in terms of global GDP at market exchange rates just before 2030.

Key challenges

Recent economic, socio-political and regulatory changes pose challenges for businesses intending to make inroads into China. Likewise, for Chinese companies planning to move beyond the Chinese shores, a set of different challenges await. Some of these include

  • a lack of good corporate governance practices;
  • need for alignment of accounting framework to international financial reporting standards;
  • limited access to capital market in the international arena;
  • lack of tax planning knowledge; and
  • lack of market best practices.

How PricewaterhouseCoopers can help

Armed with extensive experience and in-depth local market knowledge, PricewaterhouseCoopers offers unique insights and practical solutions to varied complex needs of businesses. Our multi-disciplinary team comprises people with extensive expertise ranging from audit, tax and advisory services. Our services include:

i) Capital market advisory

For organisations looking to raise capital for expansion and growth via the capital markets, the preparation for an initial public offering (“IPO”) can be a challenge as it requires careful consideration of the pros and cons, a thorough understanding of the process, a well thought-out business plan and strategic orchestration of action and positioning. PwC will bring our extensive experience in strategic reviews, private fund raising and financial structuring to assist you in the following ways:

Initial Planning / Preparation

Many companies start preparing for becoming a publicly listed company well before the actual IPO process starts. In fact, advance preparation is typically the critical success factor to achieving a smooth executive process - steps can be taken early to correct any potential organisational gaps or transactional issues that are identified, allowing you to take advantage of the optimum IPO window for your company. A typical IPO preparation would cover the following areas:

  • Identify the suitable listing destination
  • Understand the potential listing structures available such as Equity, REITs and Business Trusts
  • Understand financial reporting requirements for the various listing destinations
  • Identify the acceptable accounting standards for the listing destinations and restate historical financial statements
  • Strategic business planning to create a well-constructed and attractive IPO story for the investors
  • Group restructuring and management reorganisation
  • Review effectiveness of existing finance function, technology infrastructure, and management information and reporting systems
  • Review corporate governance and internal controls requirements

Going Public

Going public is the process of taking the company through the steps of gathering the necessary financial, marketing and business information; being subject to detailed financial and legal due diligence; preparing the prospectus and clearing this with the regulators; and then marketing the business and selling the shares in the road show. This registration process ends when the offering is sold and the company, and / or its shareholders receive the proceeds. Some of the key listing processes are:

  • Compliance with the listing criteria
  • Compliance with the financial information and prospectus disclosure requirements
  • Preparation of historical financial information
  • Preparation of financial forecast
  • Identify the tax efficient corporate structure
  • Appoint independent directors and board subcommittees

Being Public

Once listed, a company will be under far greater scrutiny and will have a range of continuing obligations to comply with. Any weakness in systems or failure to comply could cause management public embarrassment, reputational damage as well as the potential for company and personal fines. It is the first 12 months post-IPO where the benefits of careful preparation and planning are realised. The company, post listing may require to pay attention to the following:

  • Corporate strategy and development
  • Compliance with continuous listing requirements
  • Compliance with corporate governance code
  • Establish risk management and internal controls framework
  • Review management information and reporting systems to meet the requirement of the listed company
  • Set up investor relations functions

ii) Deal advisory

For mergers & acquisitions (M&A), joint-ventures, divestments, management buy-ins/buy-outs, private equity fund raising, we provide Lead Advisory and Deal Support for both buyers and vendors to help you maximise your deal value throughout the entire transaction.

An integrated deal spectrum

iii) Tax

If your company has China business and operating, it will regionally generates a wide variety of tax issues. We can help. With member firms in the regional network, we offer a complete range of tax services, tailored to your specific industry, wherever you may need them. It's all part of our commitment to helping you address your company's business challenges around the corner.

Detail information in Tax service in Singapore and Tax service website in China.