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

 

 

Problem occurred, as expected, about the accumulation of PA’s shares.  Initial investment has gone up over time.  It took long time to locate the share registration documents.  There was gap between 1997 and 2004 because shares were received (especially 2001 and 2004) instead of dividends.  A certificate from the company explaining the shares issue would have been helpful for this kind of situation.

 

The PA has an individually-owned business.  The officer decided that the financial statements are not enough to determine value of the business.  An assessment (business performance assessment “BPA”) might be useful when the business is not a limited liability company.

 

The ownership of the company was the main problem.  The PA was still working in a computer company (an employment clause forbidden his opening company) so his/her own newly established company was registered in the name of mother-in-law (80% 2002-2005) but full investment by the PA.  The shareholding was changed in 2005 for the immigration.  The lawyer explained to the officer that the PA is an honest businessman and has nothing to hide.  The employment contract signed with the PA was a private contract under private law.  The PA’s former employer has been supplying computer products to PA’s company for sale.  A certificate from the former employer could be provided to prove the legality of the PA’s business.  The lawyer insisted to the officer that the previous employment contract should not be taken into consideration to decide on the legality of the PA’s business.

 

The RMB 3.6M profit distribution (2002-2005), according to the officer, should not be touched by the PA legally speaking (official document showed mother-in-law 80% shares) despite PA showing accounting records with distribution of profits under his/her name and explanation that the mother-in-law (retired cook since 1991, no knowledge about computer) never involved in the company.  The lawyer told the officer that the PA can provide all the necessary documents to prove all the profit distributions.

 

The officer was impressed that the PA has kept all banking transactions for past 6 years.  However, the officer could not count the unit trust fund because no update confirmation from the trust company was provided (still has enough money to qualify).

 

The officer was mixed up on the ownership of the company as the officer thought the PA is the owner (PA’s son is the actual owner).  When the PA tried to explain, the officer always interrupted.

 

 

Some important documents were not notarized, .e.g. CVR which is crucial in the recognition of business assets (shares ownership) and management experience.

 

The PA got the chengbao from sister-in-law (medical reason).  The officer verified the 3-year chengbao conditions and asked why not renew the chengbao (PA opened own company).  The officer has doubt about the accumulation of funds (chengbao management fee to the sister-in-law was not a lot and it’s abnormal). The lawyer reminded the officer that he/she did not have to evaluate the chengbao terms and compensation as long as both parties agreed upon.  The PA has chengbao contract, reference letter, audit report, etc.

 

 

Other receivables in the audit reports seemed quite high.  The customers are mainly government agency and it take them more time (around 30-45 days) to pay the property management fee.

 

The officer could not consider the audit report (the CPA did not give an opinion) so the PA doesn’t have enough funds to qualify if the officer deducts the business owner’s equity.  The PA confirmed that a proper audit report could be submitted after interview.

 

The PA did not have financial reports of the company but had the financial report for 4  construction projects contracted (chengbao).  It seemed that the officer did not understand the Chengbao of the construction projects.  The officer mentioned he could not recognize the profitability if there’s no financial report for the whole company.

 

 

As expected, the officer asked several questions on management experience (scope of business, employees, ownership, and production site).  When it came to the scope of the department (PA in-charge of sales and marketing), the officer asked about the detailed activities of PA’s immediate supervisor (holds more shares, member of board of directors, in-charge of international investment).  The officer is trying to understand if the PA is able to take decision or higher approval needed.  The officer asked why there is supervisor over the PA’s department if the supervisor is not supervising.

 

The officer asked how much money the PA can spend without authorization.  The PA had some difficulties explaining his/her spending on the budget.  The PA told several times that he/she is working in a big listed company.  Therefore, there are company policies in place.

 

Questions on the market share (domestic and international %) of the company and power to hire employees were asked.

 

After asking if the PA is involving in sales, the officer said that the PA is not full time managing the department because the PA is still doing sales and has to obtain too many authorizations.  The officer had the problem with the management experience at the start and the questions were oriented to trap.

Management Experience (cont’d)

Important instruction was given to the PA to present him/herself the image of a businessman. However, the PA proudly and honestly talked too much about preparing medication (40% of time) and customer service on the shop floor.  The officer was quite respectful and had no doubt about PA’s honestly when he/she informed the client that the application was refused in consideration of the definition of full time management experience in the Quebec immigration regulations.

 

The officer talked about the management experience of the PA because he’s not the legal representative (mother-in-law).  The PA is actually involved not the mother-in-law (retired and no background in computer sale).  A lot of business contracts, accounting vouchers were shown.  More documents could be provided to reinforce the PA’s management experience.

 

The PA explained very well the property management business (customers are hospitals, schools, government offices; services provided are security, supermarket, food courts, landscaping; 1,800 employees in 5 offices).  The PA talked about his/her responsibilities (in-charge of daily operation, finance, HR and staff training matters).  The spouse assisted in the finance.

 

The PA has worked in the same industry for 13 years and had set up own company (state-owned company then privatized in 2002).  The PA gave some examples to describe the goods that use company’s chemical products (e.g. beer, medicine, etc.), number of employees, production line.

 

The PA is working in a wholly foreign invested company.  The officer asked very easy questions and about the foreign investor.  The officer recognized almost immediately the management experience.

 

 

The officer was not convinced about the money in bank.  The PA did not provide proof of distribution of profit before 2002, e.g. receipts in accounting records.

 

The reference letter proving the origin of funds (initial investment, 2 subsequent increase of capital) was made by the finance director (PA’s current employee and also worked in previous company).  The archives of former company have been kept in the current company (after privatization).  The officer doubted the income earned (1993-2002 employment income and dividends paid 2003-2004).  The PA did not keep any banking evidence.

 

The PA withdrew money from the chengbao company (withdrawal transaction of company bank account shown), simply put money in a safe (not in bank, did not want others knowing how much money made).  The PA took cash and asked the bank to make a bank draft to invest and set up the company.  The bank documents did not mention PA’s name or it’s not clear money was given to PA.  In most cases, the lawyer explained to the officer that the bank does not mention the reason of money withdrawal.  The burden of proof is in favor of the PA.

 

 

As recommended to the PA, bonus and profit distribution vouchers were provided to prove the money.  The officer noticed that the documents were not notarized.  Please be reminded to notarize important documents for future applicants.

 

The officer asked to see banking records to prove profits distribution.  The PA told that it was distributed several times a year.  The PA has several bank deposits in 2003, 2004 and 2005.

 

Prior to setting up the property management business, the PA worked in food processing industry and the officer only had 3 questions for that period (income earned, scope of business, reason for change from one industry to another).

 

The interview was very difficult, as expected.  The problem began when talked about the PA’s investment in the company (RMB 500,000 in 2002, added RMB 1.1M after 2 months and RMB 480,000 in 2004).  The PA only had the initial CVR (PA: RMB 500,000) and the 2005 CVR (increase investment of RMB 1.1M, RMB480,000 between were not official until 2005).  The registered capital was RMB 38.8 but the initial CVR stated RMB 3.18 M.  The PA explained that the government gave a land (RMB 35M, but no proof) in exchange that the company took up the liabilities.  No appraisal report, no assets/liabilities transfer documents (but could be provided after interview).  With regard to no proof of increase in capital, the PA said there’s too much paper work, ABIC allowed it unless total increase over 20% of registered capital (the company did a CVR in 2005).  The current capital is RMB 49M (only increase RMB 570,000).  Again no need to do a CVR and without CVR, the officer could not recognize the business asset value, the PA does not have enough money to qualify.

 

The officer did not insist much on the source and accumulation of funds before 1996 (how much money made year by year).

 

 

The officer took note of the receipts for the taxes paid (Jan 2004) and PA’s explanation of low tax amount (1% corporate income tax).  Officer would have liked to see receipts that match with the financial statements.

 

The officer wanted to see original tax receipts (15% for corporate income tax) by the tax bureau because the PA only seemed to have internal payment receipts for the tax and they’re copy.  The officer would review the file and decide how many years of official tax receipts to submit after the interview.

 

The tax receipts shown were not matching the audit reports (very low amounts).  The PA could not take all the tax receipts because the bank is doing an audit for a bank loan and it’s difficult to get back all records.

 

The officer noticed the tax receipts provided did not indicate any corporate income tax rate (1.2% of sales).  The officer questioned that the company doesn’t have a lot of tax (PA told it’s fixed tax) and asked if any tax policy to prove (PA did not bring).

The PA was not a very expressive type of person but the officer seemed to be satisfied with the quality of the documents and the PA’s answer.

 

The file was well prepared (documents translated and notarized), contains all important documents (reference letter, CVR, business license, history of bank accounts (6 years), tax receipts, etc).

 

The candidate was able to speak 4 words in French (thanks, sir, madam, yes).  The officer noticed the effort by the PA and seemed happy about that.

 

It seemed that the officer did not study the file before to start the interview.  It was so confused and it’s difficult to understand what the officer had in his/her head.

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