A.Launching fund
1. Corporate structure and Tax planning
We have rich experience in assisting the funds or the management company to eva luate their optimal structure and carry out relative tax planning
2. Capital verification of fund setup
3. fundregistration agency
B.Selecting the investment deals
1.Assess investment opportunity and survey government approval requirements
Based on our insights into Chinese market and industry, we can assist our clients in investigating the business information and government approval requirements in order to eva luate potential investment opportunity
2. Performing financial due diligence on target investees.
We can assist our clients in performing
financial due diligence over target investees, which will focus on following
driving factors of synergies and potential risks of the projects:
–eva luate the business model of the
target company
–Analyze the target companies’profitability,
financial condition, cash flow and utilization of financial leverage.
–eva luate the reasonableness of
accounting policiesadopted by the target investees and make adjustments to the
financial statement according to generally accepted accounting principles (such
as i.e. CAS, IFRS or US GAAP)
–Analyze and eva luate the liquidity and
recoverability of the assets
–
Analyze and eva luate the nature and amount of contingent liabilities
–
eva luate the compliance of the target investees in respect of finance
and capital injection
– Identify the potential risks that may have a negative impact on M&A deals.
3. Perform tax due diligence over target investees and transaction advisory services
The tax risks of previous operation and its tax effectiveness are the key factors that may have an impact on whether the funds will invest in the target company. Besides, these factors may also have an impact on the ways of the investment, the amount of the investment, the expected rate of return, etc. In order to assist the funds to make an effective eva luation over these factors, the tax due diligence we provided will cover the following aspects:
-Identify and quantify the potential risksincurred in pervious operations of the target company regarding taxes, foreign exchange, transfer pricing, customs, etc.
- Analyze the impact of the above mentioned risks
- Provide solutionsto these above mentioned risks
- Provide adviceon the processing of deals in the aspect of tax, law and regulations.
-Planning ahead for the tax issues (holding and operation periods, exit scheme, etc.), in order to assist the funds to make the most reasonable overall eva luation for the deals.
4. Assis the implementation for the investment deals
Our professional team can help perform implementation work of the investment deals for the funds in all aspects, such as:
-Assist in project negotiation and provide professional supports in the aspects of finance and tax
- Prepare relevant application and file materials for the investment deals;
- Submit the application to relevant government departments and clear the queries;
- Follow up timely in order to facilitate the transaction
5. Review internal control of the target company
Our internal control specialists can help our client eva luate the internal control environment of the target company in order to provide key information of the level and weakness of the general management of the target company.
6. Valuate the target company and the commercial value of its business.
Our valuation specialists can help eva luate the commercial value and equity value and provide suggestions on the reasonableness of the estimation for the financial model used by the target company. Also, they can help analyze the hypothetical parameters of the eva luation (such as discount rate, trading multiples, comparable company, etc.)
Besides, our valuation specialists can help
assist PE or VC in price negotiation, such as explain and illustrate the relevant
eva luation method, reference parameter, the impact of the adjusted financial statement
after financial and tax due diligence on valuation, etc.
C.Participate in the investment management
1. Provide advisory for the integration of the financial management and optimization of the internal control process
What needs to be vigorously promoted by PE or VC before the exit is that to improve the enterprise value by improving the performance of the target company. Our professional team can assist our clients to enhance the target company’s performance by our rich experiences, including:
-Provide integration solutions of the financial management of the target company and offer sufficient guidancein due course.
-providereasonable suggestions of improving the management process of finance, cash, inventory and other internal control programsthrough the on-site understanding and eva luation,.
- In the aspect of operating effectiveness, we can offer suggestions of industry best practices for the target company.
2. Tax planning advisory for the target company
Reasonable tax planning can help the target company enhance its operating and tax effectiveness, thereby improving thereturn rate and realizable value for the funds (as investors). Generally, our tax planning covers the following aspects:
- Supply chain review and turnover tax planning
-Planning for
the enterprise income tax;
-Advisory for related party transaction and transferring pricing;
- Suggestions on tax optimization for business and operating models;
- Planning for individual income tax;
3. Internal review for tax compliance of the target company and tax agent services
The Chinese tax treatmentsfor the operation of the target company mainly include EIT, VAT, BT and customs duty. Our tax specialist, having rich experience, can offer internal review for tax compliance and tax agent services for clients (the target company) of all industries
4. Financial
statement audit for the target company
D.Exit of the investments
1. Tax planning for the exit of the funds
We can offer suggestions for any exit option in respect of Chinese tax treatment, quantify relevant tax effect and suggestion for the options with the minimal tax effect and potential tax risks.
2. Implementation for the exit option
We may assist in the deal exit by following:
-Prepare application documents
-Submit application documents to relevant government department
- Follow up afterwards;
-Negotiate with relevant tax authority to get the most reasonable tax treatments
3. IPO financial and tax advisor for the target company - while the IPO is the exit option
E.during the daily management of the funds
1. The outsourcing services of accounting and tax for the funds and the fund management companies
Considering the highly specialized operating characteristics of the PE or VC, our professional teams can offer outsource services for back officeoperations.
2. Assist in preparation of investment performance reports to limited partners
As the general partner and the manager of the funds, it is necessary and obligatory to provide investment performance report to limited partners regularly. A high qualified investment performance report not only helps the limited partners to understand the historical and currentsituation of the fund, but also helps display manager strength.
Our professional teams have years of experiences in providing services for PE or VC, and have a great understanding for the focus and demand of the general partners, managers and limited partners. We can assist the manager to prepare the investment performance report with the combination of both domestic and international PE’s or VC’s advanced experiences.
3. Provide preparation, consultant and assurance services for the investment performance report under Global Investment Performance Standards
Global Investment Performance Standards (GIPS) is a globally recognized investment performance reporting standard released by CFA. GIPS offer unified standards to investments performance comparison across different countries and managers.
Our professional teams include several specialists who hold CFA qualification, and can offer following services with regards to the GIPS investment performance report for the funds:
-Providing
professional knowledge for the preparation of GIPS reports
-Providing
consultant services for any queries incurred during the preparation of the GIPS
reports
-Providing assurance services for the GIPS reports prepared by clients.
4. Providing statutory audit for the funds and the fund management company or any other financial statement audit under other accounting standards
5. Review calculation of carried Interest
6. Review Capital
account of limited partners
