Lawrence Hu, Senior Associate at MWE China Law Offices addressed the International law Practice division of the ninth session of the All China Lawyers Association (Session) in a lecture entitled “PRC Tax Lawyers Should be the Chief Designer of Outbound Investment Structures.” Over 1,000 lawyers from around China attended the Session held in Tsingtao, Shandong Province in October 2011. Lawrence Hu is the first person to point out the role of PRC tax lawyers in outbound investment projects.
The design of outbound investment structures has traditionally been dominated by international law firms with little involvement by People’s Republic of China (PRC) tax lawyers. Based on Lawrence’s extensive experience in tax law, he persuasively advocated that PRC tax lawyers should play a key role in the design of outbound investment structures, because:
1. Returns from investments are foremost on the minds of Chinese enterprises making outbound investments. However, the complexity of the multi-level investment structures employed necessitates consideration of China’s tax regime and tax treaties – of which China is a party – governing this area. PRC lawyers’ familiarity and knowledge of China’s tax regime and its tax treaties provide invaluable insight into the design of outward bound investment structures.
2. PRC lawyers, especially effectively bilingual lawyers, can play a key role as a trusted advisor to the management of Chinese companies contemplating outbound investment. These lawyers are able to understand the laws of many jurisdictions and help management – who frequently have limited bilingual ability – to understand the tax implications of their investments and help them craft the final investment structure that is suitable for their needs.Lawrence’s speech was later featured in Fangyuan, in a section profiling opportunities in international-related practice. Fangyuan is a publication of the Supreme People’s Procuratorate – the highest agency at the national level responsible for both prosecution and investigation in the PRC.