Tuesday, June 30, 2009

Going to Court in China

It’s been a slow and steamy summer here in the Pearl River Delta.  Anytime I think of Delta’s: Mississippi, Me Kong, Delta Dawn, I think of humidity and other things.  It’s been all of those here recently, but it hasn’t slowed down the pace of business or life in Southern China.  On a non legal note, it doesn’t seem like the world is in a recession when you walk around here.  People are moving and spending money and buying stuff like crazy.

Onto a legal hodgepodge from the Delta:
  • Stay away from Court in China (or anywhere else for that matter).
We had an opportunity to attend a hearing in the Shenzhen Peoples Court the other day and it was once again an interesting experience.  As I always tell y’all “stay out of court at all costs.”  Even in China, the only one who wins in court are the lawyers – who conveniently get their fees paid up front.

Anyway, I was observing a hearing between a Chinese national and a foreigner and although the result seemed to come out fairly, it didn’t seem to be based upon law, precedent, logic or much else.  I also don’t think the foreigner thought it came out fairly.

The judge, in China, is basically a mediator and he listened to both sides of the story, then he met with both sides separately and after a few hours in a hot and steamy court room, he issued his order.  My advice to y’all is to make sure that you have everything in order so that you don’t need to go to court.  How many times do I have to hear about the foreigner who trusted his Chinese factory or partner and then ended up with an expensive lesson.  Have agreements and do things legally and you will undoubtedly avoid court.

  • The taxman striketh again.
I’ve been telling y’all how our governments are all broke and printing money and that the only way to even attempt at lowering the deficits is to get back lost tax revenues from citizens and corporations operating offshore.  You can see my previous blawgs for more information.

Well, seems that the UK government just reached an agreement with Liechtenstein to end banking secrecy which will undoubtedly churn out substantial tax bills to UK citizens who have been legally keeping their money in Liechtenstein banks.  While many of these are “super” wealthy people, for those of you who are “kinda” wealthy and want to be more wealthy, there are alternative and legal tax havens here in the PRD that you can take advantage of.  Here is an excerpt of the article on the UK – Liechtenstein agreement, pay attention to the last line:
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The UK is expected to sign a deal to recover lost tax from Britons holding bank accounts in Liechtenstein.

HM Revenue & Customs (HMRC) has agreed with the Alpine tax haven to start exchanging information.  Up to 5,000 British investors have an estimated £3bn stashed away in secret accounts in the country.
Investors are expected to be offered the chance to volunteer details of their deposits in return for limited penalties and low risk of prosecution.  More details of the deal with Liechtenstein’s royal family and its government will be announced later on Tuesday.

Pressure has mounted on tax havens to share information since April’s G20 Summit and similar deals have already been struck with the US and Germany.   The small principality between Switzerland and Austria is renowned for the secrecy that shrouds the financial affairs of rich investors.

It was once considered to be among the most secretive jurisdictions in the world.  Governments are particularly keen to trace and recover unpaid revenues as tax receipts fall in the global recession.

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