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Tailored Services of the highest standards

We are a leading firm in providing added value business services around tax, legal and finance related issues to international firms operating and developing in Mainland China and Hong Kong.

Our Team

With an expert international team of over 80 professionals and 5 offices, we work closely with our clients not only in major issues, but also on their day to day operational needs.

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Check our latest news to know about Export Tax Refund Policy, Implementation of the Social Credit Score, pre tax deduction of R&D expenses, etc...

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On-Site Experience

Our Firm’s long established presence in China and Hong Kong has allowed us to acquire the expertise and build the relationships to best address the complexities of doing business in both territories.

Agile Solutions in a Changing Environment

In a continent as vast and complex as Asia, the organizational structure of Orcom C&A allows the firm’s professionals to easily provide assistance on issues that involve not only different fields, but also different geographical areas.

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News

The Hainan Free Trade Port Law

The Hainan Free Trade Port Law

On June 10th, 2021, the Standing Committee of the 13th National People’s Congress adopted the Hainan Free Trade Port Law, effective immediately.

The law stipulates that Hainan will establish a free trade port policy and institutional system. The Chinese authorities’ goal is to achieve the liberalization of trade, investment, cross‑border capital flows, and safe flow of data.

One year before, Chinese authorities had already released the plan for the construction of the Hainan Free Trade Port. This new Law will lay a solid legal foundation for the construction operations, ensuring Hainan's opening-up and development is based on the rule of law.

Below are some key highlights of the new Law.

1.     Freedom and facilitation of trade.

The authorities will establish a special regional system for customs supervision of the Hainan Free Trade Port, which will operate the island-wide customs clearance and operation. Goods and articles (except for those listed as restricted import) can enter and exit freely between overseas and the Hainan FTP, and the customs shall supervise them.

The Hainan FTP will also implement a negative list management system for cross-border service trade and a matching fund payment and transfer system.

2.     Investment freedom

The Hainan Free Trade Port will liberalize investment access, except for areas that involve national security, social stability, ecological protection red lines, major public interests, and other areas where countries implement access management.

Hainan had already rolled out a negative list, effective from February 1st 2021. For more information on Hainan’s negative list, you can read our previous commentary here.

3.     Taxation

The Law is encouraging Hainan Province to issue local government bonds to support the construction of the Hainan Free Trade Port project.

After year 2025 (when the system for custom supervision will be fully operative), goods imported from overseas will be exempt from import duties. Before that date, only certain qualifying imported goods will be exempted from import duties, VAT and consumption taxes.

For goods entering the Hainan Free Trade Port from the Mainland, the collected value-added and consumption tax will be refunded in accordance with the relevant regulations.

Preferential corporate and individual income tax will also be applied to eligible enterprises and individuals registered as residents in the Hainan Free Trade Port.

4.     Environmental protection

The new Law puts a strong emphasis on the protection of the natural environment. The Hainan FTP implements a lifelong accountability system for damage to the ecological environment. The responsible persons that cause serious damage to the ecological environment will be strictly held accountable.

5.     Talent support

With the goal of attracting international talent, the Hainan FTP will implement a more open policy for residence permits, simplifying the working visa application policies. Restrictions on foreign personnel taking vocational qualification examinations will also be relaxed, and a one-way recognition list system for qualified foreign professional qualifications will be implemented.

Contact our team for more information on the Hainan FTP Law and incentives for foreign investors.

Sep 14,2021
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On June 10th, 2021, the Standing Committee of the 13th National People’s Congress adopted the Hainan Free Trade Port Law, effective immediately.

The law stipulates that Hainan will establish a free trade port policy and institutional system. The Chinese authorities’ goal is to achieve the liberalization of trade, investment, cross‑border capital...

The Hong Kong IRD to implement e-filing procedures for tax returns

The Hong Kong IRD to implement e-filing procedures for tax returns

The Hong Kong Inland Revenue Department (Amendment) (Miscellaneous Provisions) Bill was gazetted on March 19st, 2021. The Bill announced that the IRD intends to revise the statutory framework for furnishing tax returns, making it easier for corporations and partnerships to electronically file their Profits Tax Returns for any year of assessment from 2015/16 to 2020/21 and attach supplementary forms to Profits Tax Return S1, S2, S3 and S4.

The IRD is undertaking this project to enable more businesses to file their PTRs electronically, and as part of a wider plan to upgrade its IT infrastructure and optimize services to taxpayers in the following years.

The Bill is setting out a framework for e-filing, including roles and responsibilities, as well as liabilities of different parties. One of the expected improvements the Bill will bring to taxpayers is the streamlining of tax filing procedures, especially for SMEs.

While there are still some uncertainties regarding the implementation, this Bill shows that the IRD is taking serious steps in modernizing its IT infrastructure and enhancing the efficiency of the tax administration.  

Contact our Hong Kong team for further assistance on tax-related issues.

Sep 14,2021
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173653

The Hong Kong Inland Revenue Department (Amendment) (Miscellaneous Provisions) Bill was gazetted on March 19st, 2021. The Bill announced that the IRD intends to revise the statutory framework for furnishing tax returns, making it easier for corporations and partnerships to electronically file their Profits Tax Returns for any year of assessment from 2015/16 to 2020/21 and attach supplementary forms to Profits Tax Return S1, S2, S3 and S4.

The IRD is undertaking this...

China's Data Security Law

China's Data Security Law

Data is considered a fundamental resource in China and data security has become a major issue related to national, economic, and social development. Aiming to protect national interests, the new Data Security Law was passed by Chinese authorities in June 2021, coming into force on September 1st, 2021.

The purpose of the Law is to regulate a wide range of issues related to data activities. These issues include the collection, storage, use, exchange, and publication of any kind of data.

Below are some highlights of the Law.

  1. Extraterritorial effect and cross-border data transfer requirements

The Data Security Law has broadened the extraterritorial jurisdiction previously provided by the Network Security Law, applying to data activities conducted both in the PRC and abroad.

According to the Cybersecurity Law, data collected and generated by critical information infrastructure operators are bound to be stored within the territory of China. With the Data Security Law, whenever such data needs to be transferred overseas, a security assessment should be performed first.

Moreover, the DSL stipulates that any provision of data stored in the PRC that is made in response to a request by any foreign judicial body or law enforcement authority will be subject to the prior approval of the competent authority.  Entities or individuals failing to comply could be fined up to RMB 5 million for enterprise and RMB 500,000 for an individual.

  1. Compliance obligations and data management systems

The Law imposes the following obligations on entities and individuals carrying out data activities:

  • Establish a data security management system, carry out security training, and implement necessary security measures;
  • Strengthen risk monitoring procedures and notify users and authorities of security incidents;
  • Regularly conduct risk assessments of the data activities for processors of important data, and report results to related authorities.

According to Article 21, authorities will establish a categorical and hierarchical system for data protection which will be based on the importance of the data in economic and social development as well as the extent of harm to public security and interest. 

Data related to national security, economy, and major public interests are considered core state data. For this kind of data, a stricter management system will be implemented.

Each region and department shall determine the catalog of important data based on the categoric and hierarchical protection system.

  1. Compliance for data intermediary service providers

The new Law has clarified some requirements on data trading procedures for intermediary platforms such as Tianyancha, Qichacha, Tianyuan Data, etc. Intermediary service providers shall be required to explain the data's source, shall review and verify the identities of both parties to the transactions, and store records of the verifications and transactions.

  1. Penalties

For entities and individuals failing to comply with the Law, the penalties imposed could be severe. Corporates could be fined up to RMB 10 million and face potential criminal penalties, while individuals directly responsible could be fined for up to RMB 1 million and face potential criminal penalties. It is therefore essential for companies and individuals to start making necessary changes to remain complaint.

Key takeaways

While the new Law is strengthening data protection in China, this is still a general outline for data security procedures and more specific laws are expected to follow and clarify further requirements.

It is however worth noting how conducting regular cybersecurity audits and implementing the appropriate data risk management systems for companies and individuals in China will become increasingly important.

Orcom C&A will keep you promptly updated on the developments related to the Data Security Law. In the meantime, please contact our legal department for any questions related to this topic. 

Data is considered a...

Shanghai policy update: social security contribution for foreigners

Shanghai policy update: social security contribution for foreigners

From August 15th, 2021 all foreigners residing and working in Shanghai will be required to pay social security contributions on a mandatory basis. This update follows the expiry date of the local Notice of Shanghai Municipal Human Resources and Social Security Bureau (Hu ren she yang fa [2009] No.38, the Notice), which had provided preferential treatment to foreign residents in Shanghai until August 15th.

China’s social security system consists of five different types of insurance (pension, medical, unemployment, work-related injury, and maternity) and a housing fund scheme. The National Social Security Law has required Chinese companies and their employees to pay contributions to the Chinese social security system since October 15th, 2011. However, foreigners and residents from Hong Kong, Macau and Taiwan working in Shanghai (and their employers) have been following the above-mentioned Shanghai circular which stated that they could make contributions voluntarily. Often, employers would opt to not make any social security contributions. For this reason, after the expiry date of the circular, employers and employees should expect to see an increase in costs.

The latest social contribution rates in Shanghai are as follows:

 

Cap for base

(RMB)

Employer

Employee

Pension

31,014

16%

8%

Medical (inclusive of maternity)

31,014

10.5%

2%

Unemployment

31,014

0.5%

0.5%

Work-related injury

31,014

0.16% to 1.52%

n/a

Total

31,014

27.16% to 28.52%

10.

 

 

 

 

 

 

 

 

 

 

 

 

 

Generally, the contribution base is capped at 300 percent of the average local salary which is RMB 31,014 for Shanghai province in 2021.

China has already signed and started implementing social security agreements with 11 countries - Germany, South Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, Spain, Luxembourg, Japan, and Serbia. Citizens of these countries currently working in China are eligible for social security contribution exemptions.

Foreigners who leave China before reaching the retirement age can submit a written application to terminate the social insurance individual account. The amount remaining in the individual account can be paid in a lump sum to the employee.

While there is still some uncertainty regarding this policy update and its consequences on foreign residents in Shanghai and their employers, the expiry of the local circular is expected to affect labors costs, IIT liability and employees’ salaries. The compliance management on the employer’s side is also likely to be affected.

Contact our Shanghai team for assistance with tax planning and compliance.

From August 15th,...

The Hainan Free Trade Port Law

The Hainan Free Trade Port Law

On June 10th, 2021, the Standing Committee of the 13th National People’s Congress adopted the Hainan Free Trade Port Law, effective immediately.

The law stipulates that Hainan will establish a free trade port policy and institutional system. The Chinese authorities’ goal is to achieve the liberalization of trade, investment, cross‑border capital flows, and safe flow of data.

One year before, Chinese authorities had already released the plan for the construction of the Hainan Free Trade Port. This new Law will lay a solid legal foundation for the construction operations, ensuring Hainan's opening-up and development is based on the rule of law.

Below are some key highlights of the new Law.

1.     Freedom and facilitation of trade.

The authorities will establish a special regional system for customs supervision of the Hainan Free Trade Port, which will operate the island-wide customs clearance and operation. Goods and articles (except for those listed as restricted import) can enter and exit freely between overseas and the Hainan FTP, and the customs shall supervise them.

The Hainan FTP will also implement a negative list management system for cross-border service trade and a matching fund payment and transfer system.

2.     Investment freedom

The Hainan Free Trade Port will liberalize investment access, except for areas that involve national security, social stability, ecological protection red lines, major public interests, and other areas where countries implement access management.

Hainan had already rolled out a negative list, effective from February 1st 2021. For more information on Hainan’s negative list, you can read our previous commentary here.

3.     Taxation

The Law is encouraging Hainan Province to issue local government bonds to support the construction of the Hainan Free Trade Port project.

After year 2025 (when the system for custom supervision will be fully operative), goods imported from overseas will be exempt from import duties. Before that date, only certain qualifying imported goods will be exempted from import duties, VAT and consumption taxes.

For goods entering the Hainan Free Trade Port from the Mainland, the collected value-added and consumption tax will be refunded in accordance with the relevant regulations.

Preferential corporate and individual income tax will also be applied to eligible enterprises and individuals registered as residents in the Hainan Free Trade Port.

4.     Environmental protection

The new Law puts a strong emphasis on the protection of the natural environment. The Hainan FTP implements a lifelong accountability system for damage to the ecological environment. The responsible persons that cause serious damage to the ecological environment will be strictly held accountable.

5.     Talent support

With the goal of attracting international talent, the Hainan FTP will implement a more open policy for residence permits, simplifying the working visa application policies. Restrictions on foreign personnel taking vocational qualification examinations will also be relaxed, and a one-way recognition list system for qualified foreign professional qualifications will be implemented.

Contact our team for more information on the Hainan FTP Law and incentives for foreign investors.

On...

The Hong Kong IRD to implement e-filing procedures for tax returns

The Hong Kong IRD to implement e-filing procedures for tax returns

The Hong Kong Inland Revenue Department (Amendment) (Miscellaneous Provisions) Bill was gazetted on March 19st, 2021. The Bill announced that the IRD intends to revise the statutory framework for furnishing tax returns, making it easier for corporations and partnerships to electronically file their Profits Tax Returns for any year of assessment from 2015/16 to 2020/21 and attach supplementary forms to Profits Tax Return S1, S2, S3 and S4.

The IRD is undertaking this project to enable more businesses to file their PTRs electronically, and as part of a wider plan to upgrade its IT infrastructure and optimize services to taxpayers in the following years.

The Bill is setting out a framework for e-filing, including roles and responsibilities, as well as liabilities of different parties. One of the expected improvements the Bill will bring to taxpayers is the streamlining of tax filing procedures, especially for SMEs.

While there are still some uncertainties regarding the implementation, this Bill shows that the IRD is taking serious steps in modernizing its IT infrastructure and enhancing the efficiency of the tax administration.  

Contact our Hong Kong team for further assistance on tax-related issues.

The Hong Kong Inland Revenue...

why choose us

The Firm’s long established presence in China and Hong Kong has allowed us to acquire the expertise and build the relationships to best address the complexities of doing business in China and Hong Kong. These strengths coupled with the international background of the Firm, enable us to operate as a bridge for foreign companies operating in China and Hong Kong. Our clients are multinational corporations, small-medium enterprises and individuals. They choose Orcom C&A for the high and consistent standard of services...

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Credentials

In the past 2 years we have been working with Orcom C&A and we have appreciated the flexible, punctual and competent support in advising us on both our long term planning and daily issues.  It has been very important for us to be able to cooperate with an advisor who can support us locally and communicate with our HQ in Italy.

Fabrizio Finocchiaro, Managing Director of Vodafone Automotive

Orcom C&A provides valuable additional support to our management, which is much needed in a changing, progressive and challenging China. Today we put more time on creative and commercial work, assured that Orcom C&A looks after our interests in the accounting and tax aspects.

Sergio Spadone, CEO of DEBAO

During the establishment of NeoXam in China, we needed an administrative, accounting and legal partner to guide us, advise us and reassure us, not only at the first stage of the establishment, but in daily issues as well. The possibility to have partners who can speak French with our HQ, Chinese with the management on site and English is a real plus. It has been already two years working with Marco D'Amore and Orcom C&A: we are totally satisfied and intend to continue to rely on their expertise to support us throughout our development in Asia.

Axel Jacquet, COO of NeoXam China

My company has benefited from Orcom C&A consultancy since 2005 - their key strengths are high professionalism, timeliness, courtesy and friendliness. These traits help the customers to build a perfect and durable cooperation in the challenging Chinese market.

Massimiliano de Giovanni, General Manager of Carpisa

We have been working for the last few years together with Orcom C&A with satisfaction onvarious matters regarding company governance, company restructuring and legalissues for our subsidiaries in China and Hong Kong.

Maurizio Parodi, CFO of Tenova

Orcom C&A has been an important partner for us in the last four years regarding problemsolving. With high professional expertise and extremely quick responses, they helpedus in solving financial and due diligence issues.

Paolo Daneu, CEO of Seves Group – China

ORCOM C&A have been extremely professional and helpful in advising Dormeuil during our expansion in China. They understand the market and always manage to find solutions in a complex system.

Dominic Dormeuil, President and Founder of Dormeuil

Orcom C&A has been assisting De Fonseca since more than 10 years.The quality and responsiveness of their support make them our trusted Partner, and valuable asset when operating in Chinese business environment.

Marco Fasciolo, CFO of De Fonseca

Orcom C&A has worked with us for many years, and their advice and expertise have been vital for us in building our business in China. Through their guidance, we have achieved a positive outcome with a minimum level of stress. Moreover, their friendly yet professional manner of operating has made it a great pleasure collaborating with them.

Andrea Filippi, CFO of ACS

We are grateful to ORCOM C&A, in particular to Sarah Orlando and Johannes Lazzaro, for the excellent support provided to us, which allowed us to carry out our digital collaboration projects with JD.com and Alibaba.com. They assisted us in the negotiation and finalization of the contractual aspects of these partnerships.ORCOM C&A has combined cultural and economic aspects, keeping our interests a priority and respecting the tight deadlines. We are happy to count on them in China.

Gianpaolo Bruno, Trade Commissioner of ITA - Italian Trade Agency

Working in the Chinese market is always a source of concern for those who are not accustomed to its cultural and relational peculiarities and are unfamiliar with its intricate regulatory and legislative network. ORCOM C&A is a valued partner helping us facing these challenges with the right degree of serenity, thanks to their support and their highly qualified presence on site.

Dino Pace, CEO of Nichebox

Orcom C&A is our trusted partner in China and Hong Kong. It’s always a pleasure to work with this team. They are responsive, result-oriented and professional. I highly recommend them!

Giorgio Brandinelli, CEO of GFA - Gourmet Food Art

We are grateful to Orcom C&A  for the support and excellent service provided to our companies in China and Hong Kong. They helped us set up and navigate the intricacies of the Chinese business environment while keeping our best interest at heart. 

Emmanuel Dean , CEO and Founder of Boomi

We highly recommend Orcom C&A. They have helped us set up and develop our project in Hong Kong, providing excellent assistance and support. The team is friendly and responsive, and it has been a pleasure collaborating with them!

Federico Modica, Hong Kong Branch Manager of Leonardo