INTERNSHIP PROJECT FINAL REPORT

Foreign Direct Investment in China ECOVIS BEIJING

Peter Jakubo
(160590-3629)

INTERNSHIP PROJECT FINAL REPORT

Foreign Direct Investment in China ECOVIS BEIJING
Peter Jakubo
CPR (160590-3629)
E-mail: p.jakubo@gmail.com

Facility:

EAL Lillebaelt ECOVIS Beijing

Internship Advisor: Torben Pedersen

torp@eal.com
Richard Hoffman
Richard.hoffman@ecovis.com

TABLE OF CONTENTS
Executive Summary

Introduction/Background

Goals/Objectives

Approach/Methodology

Tasks

Recommendations for Future Efforts

10

References

11

Appendices:

A. Audit Presentation

12

Executive Summary:
Ecovis Beijing is offering legal, accounting, tax and auditing services to
various companies all around the world. The targeted companies of Ecovis
are SMEs. Ecovis Beijing is very young

subsidiary with dynamic

environment which has been established only two years ago.

The Business Development Department (where internship took a place) is
responsible for managing the efforts directed to increasing the business
including offline and online marketing activities and strategy development.
The other important bunch of tasks is related to research connected to
some projects in particular. Projects are from the various fields and
acquired by various companies. The core objectives of the internship are
set within personal and professional development. Obtaining first-hand
experience and smoothly cooperation with various stakeholders of the
businesses are main goals of the internship. As the Ecovis is operating on
the Chinese market many of the particular research-based tasks are
connoted to establishing or maintaining businesses in China. Companies
with Foreign Direct Investment intentions are the cast majority of Ecoviss
clients. The stay at Ecovis Beijing was in the first months challenging due
to new cultural background and demanding workplace. My internship
turned out into the employment perspective and I am keen to see my
future career progress.

Introduction:

Ecovis Beijing is very young subsidiary of Ecovis established in year 2013.

In last 2 years company growth in revenue was approx. 250percent and
company hired additional 35employees. I believe this dynamic spirit of
organization in the fast progress helps in the efficiency to achieve the
maximum of the internship. I am very eager to understand various
phenomenal of the company and the Chinese culture in general.

Company Background:
ECOVIS Beijing China is a member of ECOVIS International, a leading
global consulting firm with its origins in Continental Europe. ECOVIS has
over 4,500 people operating in over 50 countries. Its consulting focus and
core competencies lie in the areas of tax consultation, accounting,
auditing,

legal advice

and

management consulting.

The particular

strength of ECOVIS is the combination of personal advice at a local level

with the general expertise of an international and interdisciplinary network
of professionals. Every ECOVIS office can rely on qualified specialists in
the back offices as well as on the specific industrial or national know-how
of all the ECOVIS experts worldwide. Beijing team has highly qualified and
certified lawyers (LL.M.), Accountants (CPA) and Tax Agents (CTA) with
international and Chinese backgrounds. ECOVIS concentrates mainly on
mid-sized firms, both national and international. Our one-stop-shop
concept ensures all-round support in legal, fiscal, managerial and
administrative issues.

Goals/Objectives:
The Business Development Department is responsible for managing the
efforts directed to increasing the business including offline and online
marketing activities and strategy development. This includes the tasks
detailed below, and ranges from direct client contact to deploying
marketing strategies in daily operations
The core objectives of the internship are set within personal and
professional development. Obtaining first-hand experience and smoothly
cooperation with various stakeholders of the businesses are main goals of
the internship. As the Ecovis is operating on the Chinese market many of
the particular research-based tasks are connoted to it:

Learning firsthand how to set up companies in China

Improving networking skills (Asia-western context)

Deepen knowledge in the area of accounting taxation and laws

directed at foreign companies in China

Helping to increase business of Ecovis Beijing and generate profit

for the company

Understanding online and offline marketing strategies

Increasing online and offline marketing skills

Approach/Methodology:
Tasks within department of business development vary very much. We are
challenged by various businesses and we are encouraged to provide firsthand experience via individual approach. Each task is determined by
through

research

which

conducted

by

department

of

business

development but information are gathered within different departments of

Ecovis Beijing. The connotation of the research depends on the type of

the task in general. Mostly one of following prevails: accounting, legal,

tax. During the research phase communication with other word wild
Ecovis departments is in common. Also many different checks lists and
prove tests apply. After the quantitative and qualitative research
summary and execution of the tasks are made.

Tasks:

Accounting services consulting/research with focus on

Foreign Direct Investments: are representing a vast majority of
turnover for the company as most of the services are not only
provided on an annual basis. This segment of services is certain
cash cow for the Ecovis Beijing and therefore pre-preparation
before the service agreement is important as well as post-trade
follow up services played an important role in my tasks. Most of my
duties were related to coordination of an accounting team which
consists of one senior accountant and 4 accounting associates.
After performing research on tasks within foreign direct investment
we did coordinate meetings with potential clients or already
acquired clients. Afterwards I followed up communication with the
client and shaped his demands into the services Ecovis offer which
are following:

financial

accounting

and

payroll

accounting,

international

accounting according to IFRS and/or US-GAAP

improvement projects concerning client's accounting system

transformation clients' accounting system from local GAAP to IFRS

accounting training for clients' staff (including IFRS)

development and implementation of group accounting manual

interim financial statements

annual balance sheets

preparation of consolidated financial statements

all types of tax returns

tax statements for international employees (expatriates)

monthly, quarterly and annual VAT report

VAT reimbursement for foreign companies

development, implementation, interpretation of monthly / quarterly

reporting systems

development, implementation of group reporting systems

support of group reporting systems (cash flow statement, income

statement)

improvement projects for client's internal control

implementation of group accounting

SOX implementation projects

for

subsidiaries of global/listed

companies

cash flow management and controlling

implementation of risk management systems

support of implementation projects of risk management systems

implementation of cost accounting

implementation of transfer pricing systems

payment

transactions

(opening

bank

accounts,

handling

of

accounts, invoicing)

administrative services for subsidiaries of foreign parent companies

(local directors/secretary, registered office, nominee shareholders)

start-up consultation

Tax advisory consulting/research with focus on Foreign

Direct Investments:

Tax Advisory is related to many different

types of taxes (Individual Income Tax, Corporate Tax, Value Added

Tax etc.) flexibility and freeing resources within company. Taxation

in China is a field where most of the regulation updates take place

and it is hard to follow up within this vague field. One of the
common phenomena is that Chinese Government is tightening up
resources by implementing various taxes (VAT recently) especially
targeting foreign investors. Often matters of tax overlap with legal
and economic factors and one must be able to access the
appropriate specialist knowledge which was my task to coordinate
and

achieve

positive

outcome,

similar

as

within

accounting

consulting. Another task related to taxation is writing a publication

which is supposed to make understand general public about
different types of taxation in China. The main tax services of Ecovis
focuses on:

National and International fiscal arrangements and tax planning

(corporate, employees, private)

advice on purchase and sale of companies, mergers, joint ventures,

management buy-outs and buy ins

national and international tax optimization

advice on initial public offering

national and international succession planning (corporate and

private)

representation before public authorities and fiscal courts

tax due diligence

advice on privatization

advice on financial reorganization

advice on business succession

advice on financing and investment banking (investment appraisal,

venture capital negotiations, financial planning)

advice to public administration and public sector businesses

organization advice ( advice on restructuring, outsourcing, interim

management)

Auditing consulting/research with focus on Foreign Direct

Investments:

the

annual

audit

is

not

essential

only

for

headquarter and the leading managers of the company but it is

also appreciated to do a health check. China is a special place with
its own characteristics in doing business and managers are
encouraged to understand what this means for the company. Ecovis
is experienced in many industries what makes the company
efficient. For example in my charge was to create a presentation
proposal of auditing services for a big company which asked us to
make audit in 3 subsidiaries (Hong-Kong, Beijing, Shanghai) where
we are sending our auditing team (3 Audit Senior Managers and 2
Associates) chronologically. (See mentioned presentation describing
the project in the appendix). Another auditing services are:

voluntary and statutory audits of annual accounts and consolidated

financial statements according ISA

special audits as required by legislation

SOX-audits of subsidiaries of global/listed companies as support for

the group auditor

Review of financial statements

support of acquisition or formation of subsidiaries or permanent

establishments

financial due diligence

valuation of enterprises as a whole

strategic development and monitoring there of (feasibility studies,

SWOT analysis, location analysis, ABC analysis)

Legal Services consulting/research with focus on Foreign

Direct Investments: Legal team assists with commercial contract

drafting or revisions, trademark filing, or employment advisory.
Prime objective is always to be pro-active and to avoid disputes or
litigation at a later stage that requires lots of research to be done
and consequently monitor market and very dynamic legal scheme
in China. There are many rules being introduced in the Chinese
legal system constantly which we need to monitor and always
educate governmental officials or institutions about them as the
transparency end education within Chinese public sector itself is
rather slow. The majority of my tasks were related to the setting up
an official business entity in China. The most common one is WOFE
(Wholly owned foreign enterprise). Another offered services are:

commercial and corporate law

national and international contract law

competition law

company incorporation

industrial property protection

law due diligence

matters of management, executive and supervisory board

advice on purchase and sale of companies, mergers, joint ventures,

management buy-outs and buy ins

labour law

insolvency law

planning laws and building regulations/real estate law

conduct of cases

Another common task which I was participating in are having smaller

character but still a great impotency. Especially interaction with foreign
investors and governmental institution has great impact on my progress

in general. After gathering hand-in experience and learning basic

company routines I was able to participate in strategy making and
marketing (Online/Offline):

Arrange

and

take

part

in

meetings

with

government

organizations and international clients

Assist with acquisitions of new clients and intercultural

communication

Work with local businesses and organizations to enhance

strategic partnerships

Develop Marketing / PR strategies to increase business

Conslusion/Project Results:
The stay at Ecovis Beijing makes my various skills which I gained during
my studies at EAL shaped into the real tool which I can use to achieve
various outcomes in my business or private live. My stay at Ecovis Beijing
was in the first months challenging due to new cultural background and
demanding workplace. My internship turned out into the employment
perspective and I am keen to see my future career progress.

Recommendations for future efforts:

In regards of company I believe that profit is going to grow at least as
during last two years of companys performance when Ecovis Beijing hired
additional 35 employees. Ecovis Beijing is very young subsidiary and I
believe its vision is not difficult to accomplish in the short future.
Personally I see myself progressing in the field of business advisory. Right
now I have the best opportunity to grasp knowledge from the various
fields applied on the Chinese market.

References:
Richard Hoffman, Partner Ecovis Beijing
Manuela Reintgen, Senior Business Development Manager
Constantin Colberg, Business Development Manager

Literature:
www.ecovis-beijing.com
www.ecovis.com
- various brochures and publications published by Ecovis Beijing

Appendices:
A. Audit-Proposal Presentation EBRO