Interview Report Summary (Jun 3-Jun 9, 2006)
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
Assets
The officer got a little confused with the company’s assets. The PA patiently clarified. The officer wants to re-calculate the property assets basing on the new BIQ rules. The officer said he would count only 30% of the value under the PA because at the time of purchase, the property was put under the spouse.
The officer took exchange rate of the interview date to verify the cash at bank. The property was under the company and could not be considered in the personal asset of the PA. According to the officer, the financial statements of the company do not reflect the value of the property (owner’s equity). Therefore, the total personal asset of the PA was not enough to qualify. The officer could not accept the application.
The officer said that BIQ has made some checks with ABIC and that the PA is no longer a shareholder since Apr 2004 but the spouse is a shareholder. Consequently, the PA does not have sufficient asset under the PA’s name to qualify. The application was refused.
An explanation from CPA regarding the amount of RMB 1M deposited into the PA’s personal bank account in April 2006. The PA said it was his/her dividend. The officer was quite surprised. According to the officer, it meant the owner’s equity has changed and the documents provided no longer reflect the PA’s personal asset.
Documentation
The PA’s son completed his semester in May 2006. It is not clear whether son will continue study or not. Proof confirming son’s continuous study is required.
The PA did not bring some original documents, e.g. bank books/slips, education diploma in Management. The officer was suspicious that the PA did not have the said diploma.
The interview was a lot more difficult that predicted. BIQ has obtained information that the PA has been legal representative for another company since July 2005. In the immigration application, only one company is declared.
Chengbao till now, there is only a letter from ABIC as proof of shareholding (another Japanese company still owns this business). The PA could not explain what the ABIC bases to write this letter. The cheongsam document was not signed with the right person.
Financial Report
The PA was fairly good at explaining the operations of two companies. However, there were some main issues. Company X did not report any revenues, only payables and receivables were reported in the financial statements. Company Y registered in China has employees paid in RMB but the financial statements do not indicate any payroll. The officer was no convinced that the setting-up of BIV is legal for tax issues. It was not clear how come a company that operates in China does not declare or pay any taxes. The BIV which was set up from HK does not seem to operate in HK (no proof). The financial statements submitted did not convince the officer that the two companies are operational.
The PA did quite well at explaining the company operation and figures of financial statements.
In financial statement 2003, the company showed profits. When officer asked about the big challenge, the PA talked about SARs in 2003 and he lost a lot of money.
Management Experience
The PA is a minor shareholder, in the position of Vice GM and does not seem to have final decision power. The officer requested to provide large contracts signed by the PA to prove management experience and the amount of sales.
Proof of Income
The officer asked the PA to present proof of his/her earnings before 1998. The PA showed reference letter, income certificate, appointment notice. The officer asked to see independent proof of his/her income, e.g. bank records.
About 1992-1999, RMB 2.3M was claimed as income, but only two documents as proof, a fax copy of brother’s bank account in Japan as statement on labor contract and a nomination letter dated 1992.
The PA earned RMB 30M before 2000 with an individual company and two markets. The officer mentioned that the financial statements for these 3 businesses are in the form of a summary not a proper year-by-year financial report. Besides, the officer could not see if the PA had enough money to invest in a street market (RMB 3M in 1992) and garment bazaar (investment RMB 3.5M in 1995, total earning claimed RMB 15M). One could feel the problem to believe that the PA could make RMB 30M. Then, a current Group company was set up. Where did the money come from to increase the registered capital in 2003 (the PA was confused if profit distributed or undistributed profits, and some capital from other companies). The PA did not have bank proofs for the dividends received. The officer said he/she believes the PA but the proof/documentation is too weak.
Tax
All tax vouchers for year 2005 are required by the officer to be submitted after interview.
The officer requested additional document to be provided. Statement from tax bureau to confirm the company has paid all due taxes, to confirm the amount of taxes paid and to indicate if the company enjoys a tax exemption or reduction.
Misc.
The interview was a challenge on many aspects. Such confusion (PA’s answers contradicted the documentation, translation, confusion of the officer) could have been prevented with a minimum logic in the file organization/presentation, stronger documentation and preparation of the PA.
The PA’s explanation reflected his/her confidence. The answers were clear and concise. The PA could accurately state his/her income and explain the sources of RMB 5.7M from the chengbao (1998-2000) and the current company. The PA used equipment to invest in the current company but did not bring to the interview those receipts for the investment made in equipments.
Some officers are very strict on new documents that were not submitted prior to interview. The PA showed some receipts, a few copies of company bank statements to the officer who refused to consider them. These documents were only in Chinese.
The immigration agent and the PA followed lawyer’s recommendations and prepared documentation well. The PA has been accepted by the BIQ officer on the spot and the interview lasted about 1 hour.
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