Officers in HK:                         Mr. Luc Bernard, Mr. Daniel A. Leblanc, Mr. Jean Chouinard

                        Mr. Kim Le Van (appears to have limited knowledge of China),

                        Mdm Agnes Nyugen, Ms. Leslie Stoianov

 

The officer said that the bank deposits are made a month ago.  The PA could not provide banking history without which the officer is unable to establish the permanence of money in bank.

 

At the time of file submission, the PA could not have earned by own effort enough money to qualify.  The officer had enough reason to refuse the application.

 

The officer verified the assets.  The PA provided banking history (2004-2005).  The officer asked about the origin of the several big deposits done in 2004.

 

The money (RMB 3.35M) to purchase the properties was borrowed from the PA’s company.  The officer asked for the banking records for past 6 months.

 

 

The PA gave different answer at the interview than document (income certificate).

 

The PA established and invested in 3 companies.  Two of them were closed but no evidence if the PA received money at the closure (no bank records, no audit).

 

The officer said right from the start of the interview that the file has no source of funds and he/she has serious doubts about the accumulation of funds.  The officer also pointed out that the file was badly prepared.

 

The PA invested more money in 2000 beside the initial investment.  The PA explained that he/she received dividend (1998-1999).  The PA did not bring resolution of the board.  The officer said he’ll ask for additional documents.

 

The company became privatized (1999).  The PA did not bring any document (e.g. business license before privatization or certificate from ABIC).  The officer was no way to know if the company existed before 1999, etc.

 

The PA showed a copy of document about the calculation of his/her commission.  It was a good document but it’s useless unless the PA provide document (e.g. business license) proving the existence of the company.  The officer has a big problem with the source of fund (1976-1996).

 

The two article of association (one with ABIC seal, one without) were submitted to BIQ at different time are in contradiction and contain translation mistakes.  No CVR (1996) for the officer to verify the PA’s investment.  It’s not easy for the easy to know which one is good.

 

The officer complained that the document about the PA’s commission when he/she worked as employee in foreign trade was not clear.

It was difficult for the officer to analyze the financial situation of the PA’s current business.  No business contracts.

 

 

The PA has been in the same business for 15 years.  At the interview, the PA was unable to tell where the products come from and mentioned that he/she is not doing the sales. 

 

The PA had a lot of trouble explaining how he/she is managing the company.  The spouse was whispering answers (despite advice).  At some point, the spouse answered several questions.  It was obvious the PA is not running the company.

 

The PA gave straightforward explanation why he’d not become a shareholder of the company.  He/She answered adequately about company’s operations, his/her job duties, figures in the financial statements and how his/her commissions are calculated.  The PA has an MBA.

 

The officer asked some easy questions to verify the managerial experience (PA owns 10% shares in the company).  The PA explained his/her duties (finance, HR, overall management) and showed company brochure, contracts signed by the PA.

 

The PA is a young candidate.  He/she is working in father’s company.  It was a challenge for the PA to demonstrate management power in the company (not father).  The PA, in fact, seems not to understand about the financial statements.

 

 

The officer said the PA did not have any document to support his/her income (1978-1995).  The PA claimed that he/she invested in stocks in 1995 (RMB100,000 borrowed from father and brother).  There’s no stock transaction history (stock worth RMB550,000 at 2000).  The officer has big doubt about this story.

The PA made more than RMB 4.77M (1981-1999, state-owned company).  The PA showed reference letter, income certificate, copy of former business license and a calculation sheet of bonuses issued in 1996, audit report (plus internal financial statements) of 1998-2000.  The officer said he’d recognize the RMB 4.77M.

 

The PA claimed a revenue RMB 1.06M (1980-1998).  The officer asked if the PA had any banking records.  The PA said indeed he/she doubted it would be possible to obtain it because the banks were not computerized in those years.  However, the PA added that he could certainly obtain banking records easily for past 5 years.  The officer was testing the PA (reaction, attitude, etc.)

 

The PA ceased the company in 2004 and established a new company with registered capital RMB 15M (12M under PA and 3M under daughter).  As expected, the officer asked for the source and banking records.  Since the company (ceased in 2004) paid 0.25% of sales as corporate income tax, the officer said he/she cannot verify if it was possible to pay 15M dividends.

Proof of Income (cont’d)

The officer explained to the PA that the file was badly prepared and the source of funds (money reception) was poorly documented to deserve the officer to give a chance for additional documents.  The officer simply was not able to accept the application.

 

The PA earned RMB 4.2M (guakao period) but the proof of income was not enough documented according to the officer.  The officer insisted to have personal income tax vouchers.

 

The officer would like to see more proof about distribution of profits.  Only one dividend receipt (2004) was provided.

 

 

According to the officer, the tax rate in documents did not match with the rate in the financial statements.

 

The company benefited tax reduction (15% corporate income tax).  An important document issued by the tax bureau confirming the taxes (sales tax, corporate income tax) paid each year since creation (2000).  This tax bureau certificate is very useful to establish the credibility of the audit reports (sales more than RMB 120M).

 

The PA did not bring tax receipt and told the officer that the tax bureau was carrying out an investigation on the company.  The company enjoys tax reduction because of hiring disable employees.  Another BIQ officer would have found this quite unusual and would have asked when the PA is going to get back the tax receipts, etc….

 

 

The interview lasted 2 hours but the interview went very well and the file and the PA were one of the best prepared.  The lawyer has no negative comment.  The application has been accepted on the spot.

 

The Officer asked if the current company has any relationship with the state-owned company.  The PA did not try to hide and explained in details why a limited company was established, the state-owned company (has no operation) is an investor, most of the assets were transferred into the limited company.  The corporate documents (business license, CVR) were verified by the officer.

 

The PA is involved in the creation of Chinese medicine.  The officer reminded the A about the advantages of moving to Montreal because this is the centre of medical research in Canada.  The PA’s daughter is studying microbiology.  The officer said she will have a chance to find good job in Montreal.

 

The PA received around RMB 6M (2000-now).  The officer asked how he/she spent the money (used RMB 2.8M for capital increase, RMB 1.49M bank deposit, about RMB 1M for daughter’s education overseas).  The officer did not ask to see banking history (the PA did not bring any bank history).

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