Officers in HK:                         Ms. Leslie Stojanov, Mr. M. Clemont-Desforges, Mr. Jean-Paul Benoit

 

 

The property was sold to the PA at a reduced price by the company.  The PA explained that it was a common practice in China for a company to offer such benefit to a valuable employee instead of monetary reward.

 

The property is still under the PA’s spouse.  After explanation to the effect that his/her spouse had low income, the officer seemed satisfied.

 

The officer was skeptical about the value of the property which was valued at RMB300,000 in 1996 according to the PA’s testimony, and more than RMB3,000,000 in 1999.  The PA mentioned that the company bought 8 properties.  The PA had complicated the file by this information without being asked.  The officer spent more than 30 minutes on the issue then to understand that the 8 buildings (not 8 properties) were registered under one same property title deed.  It also bothered the officer that no purchase agreement for the properties provided.

 

The officer did not consider the bank deposit RMB 1M because it was transferred from the spouse’s account to the PA’s account recently.

 

The PA failed to demonstrate with official document that he/she is the actual owner of the company.  The business registration, application form stated that the spouse is the unique owner.  BIQ applied the accumulation of funds and funds’ rule strictly.  Without the company asset, the PA doesn’t have enough assets to qualify.  In addition, the PA does not have the official paper of utilization right of land (no title deed) where she invested RMB 1M (a contract with another party) in a factory.

 

 

Some problems raised by officers and immigration consultant should be aware for future files:

- No further proof of income (e.g. bank deposit transaction, receipt with PA signature, etc.) beside a work and income certificate

- Signature on the work and income certificate is not notarized

- No original of the official document that proves the PA’s shares in the company which was established in Hong Kong (only a simple photo-copy was brought to the interview).

- It was the PA’s Hong Kong company, and not the PA himself directly, invested in the current company in China.  Then, there was a transferred of shares from the HK company to the shareholder.  There is no official document from the ABIC confirming the PA is a shareholder of the company and the officer was not satisfied with the resolution of the board.

- After the transfer of shares, the HK company was cancelled.  The officer said that a computer printout/register is not very “official”.

- The daughter’s passport was missing from the file.

- No Guakao agreement, only a certificate made recently was provided to the BIQ.

- No original asset evaluation provided

- The company was cancelled.  No original cancellation document from the ABIC to prove it.

 

The PA’s participation as shareholder in the company was registered with ABIC through the appropriate documents i.e. share transfer agreement and resolution of the board.  Since the total registered capital did not change as in the case of the PA (change of shareholder only), CVR was not necessary.  The officer did not seem to know this.  Finally, the officer needed an official document from ABIC to confirm the share % of the PA (translated and notarized).

 

The officer wanted to see evidence of company’s profitability and examples of contract the PA signed.  The PA did not have any.

 

The PA indicated that he/she invested RMB600,000 in the company but did not have any proof of that investment.

 

The PA said that he loaned RMB500,000 to invest but has no document.  Nothing to prove the repayment of the said loan.

 

No translation for tax receipts.

 

 

The financial statement 2005 was not audited so the officer asked for documents to support the financial statement.

 

No financial and corporate document to demonstrate the profitability of the company.

 

It was a problem.  No audit report for 2005.

 

No proof of income (reception of RMB3,700,000) except the audit report.

 

 

The officer mentioned that there were 3 shareholders working for the company and that could lead to believe that the PA did not take the decisions in the company.  The PA has to give a very good explanation on the day-to-day operations and what kind of decision that the PA makes, and bring proofs, e.g. contracts bearing PA’s signature (important and big amount business contracts with customers/suppliers, employment contract for key managers, big expenses approval, contract with bank), company brochure where only the PA picture appears.

 

One officer asked open questions, e.g. “can you explain your managerial experience”, or “what kind of project did you work on”.  The PA answered at ease and giving examples of his/her duties and decisions on various aspects.  The officer often asked to see company brochure showing what the company does and pictures at work.  Please remind future clients to bring.

 

The PA only had one business contract to prove his/her management experience.

 

The PA showed receipts for income and mentioned that the money was then deposited into PA’s personal bank account but that the PA did not bring the bank records.  The officer asked for more documents on the PA’s income and specifically a bank record history.  Then, the PA mentioned that he/she has payroll slips but did not bring it.

 

The officer asked how the bonuses were calculated and asked for proof of income which was in US Dollars.  The PA showed employment contract, reference letter and some payments made by the company.

 

The officer mentioned that nothing on proof of income beside the audit report.  The PA had forgotten to show that he/she brought numerous invoices to support the audit report.  The lawyer intervened to tell the officer.

 

Proof of dividend (profit distribution) – officer wants to see on the date of payment what proof to show that the PA had the money (e.g. bank transaction for one year or confirmation from the bank).

 

The PA used the money earned (1995-1998) to invest in the next company.  The proof of income was important.  The PA provided a few receipts for 1997 and 1998, and a photo-copy of deposit made in 1999 that had matured in 2002-2003.  The officer would have liked to see more receipts and bank records proving that the PA received the alleged income (1994-2000).

 

The officer wanted to see bank proofs to prove the reception of the profits.  The PA explained that the distributed profits were in cash and an important part of the money was used to purchase the property.  Therefore, the officer asked to see the purchase receipts and the purchase contract.

 

No proof that the PA made RMB900,000 between 1994 and1998 and that was used to invest in the next company, except a work certificate.  The officer was not satisfied with this only one piece of evidence.  The PA mentioned that he/she could provide bank records of the old time.

 

The company was sold in 2001.  The PA showed the transfer agreement but did not have anything to prove that he/she received money from that sale.

 

 

The PA’s company never paid corporate income tax.  The PA provided explanation on tax exemptions and that the company made profits since 2000 (when the PA was hired as GM the company was in deficit and losses and it took the PA a couple of years to turn around).  The officer was bothered that tax registration certificate for the company and personal income tax receipts were not provided.

 

The tax receipts were missing.  The officer wanted to verify a complete year of corporate income tax but the PA only had a few tax receipts for each year.  The PA said that the immigration consultant only told him/her to bring a few tax receipts and that the PA was ready to provide the missing tax receipts.  However, the officer mentioned that the interview was today and that all the documents should have been provided at least 5 days before the interview.

 

One officer wanted to see corporate tax receipts for one year in the file.  Please get it ready for future clients.

 

The BIQ, in fact, had done verification to the tax bureau about the PA’s mother company.  It seemed that the mother company indicated to the tax bureau the company was making a loss in 2004.  The officer mentioned that it contradicted to the financial report which showed profits.  The PA explained that his/her chengbao was profitable.  Perhaps the mother company declared loss because the mother company invested more than RMB800,000,000.  The lawyer intervened to tell the officer that the chengbao was financially independent and management fees paid to the mother company every month.  Furthermore, no fixed assets were indicated in the Chengbao financial reports which prove that the financial reports are only for the Chengbao purpose.  Therefore, the mother company (a collective unit responsibility) has no relation with the financial aspect of the Chengbao.

 

There were differences between the tax receipt and the numbers in the audit report.  The PA did not have all the tax receipts.

 

 

The PA was nervous but answered most of the questions appropriately.  Well done!  The officer was also impressed that the PA could speak very decent English.

 

The interview was rather difficult because of the officer’s lack of business knowledge about business in China.

 

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