Presentation by Rimaster AB Pernilla Norman, CFO and Executive Vice President
Business Orientation We offer solutions in development and production of electric, electronic and mechanical products
Company History 1982 1997 2008 409 000 2010 351 868 165 650 143 744 61 887
Product Areas Electrosystem Production and supply of cable harnesses, electrical cabinets, panels and control boxes Electronics Production and supply of PCBs and complete assembled products based on electronics Cab Development and assembly of complete cabs for special vehicles Mechanics Production and supply of sheet metal based products Development Product development and engineering services taking your product from idea to production
Product Areas Electrosystem Production and supply of cable harnesses, electrical cabinets, panels and control boxes Electronics Production and supply of PCBs and complete assembled products based on electronics Cab Development and assembly of complete cabs for special vehicles Mechanics Production and supply of sheet metal based products Development Product development and engineering services taking your product from idea to production
Product Areas Electrosystem Production and supply of cable harnesses, electrical cabinets, panels and control boxes Electronics Production and supply of PCBs and complete assembled products based on electronics Cab Development and assembly of complete cabs for special vehicles Mechanics Production and supply of sheet metal based products Development Product development and engineering services taking your product from idea to production
Product Areas Electrosystem Production and supply of cable harnesses, electrical cabinets, panels and control boxes Electronics Production and supply of PCBs and complete assembled products based on electronics Cab Development and assembly of complete cabs for special vehicles Mechanics Production and supply of sheet metal based products Development Product development and engineering services taking your product from idea to production
Product Areas Electrosystem Production and supply of cable harnesses, electrical cabinets, panels and control boxes Electronics Production and supply of PCBs and complete assembled products based on electronics Cab Development and assembly of complete cabs for special vehicles Mechanics Production and supply of sheet metal based products Development Product development and engineering services taking your product from idea to production
Market Segments Our targeted customers are industrial OEMs with a need to focus on their chosen part of the value chain We focus on the segments Special Vehicles Material handling Mining & Construction Forest & Agriculture Industrial Systems Automation & Control systems Communication systems Renewable energy & Waste management Medical instrumentation
References & Customers
Ability to create simplicity Simplicity Proximity Global
This presentation is made on our experiences and is not meant to be used as regulations. This will only give you inputs to your own investigations.. I have made the presentation in words so you more easy can have it as a help if you would like to use it in your own investigations
Overview Investigation about China during spring 2005 Decided Ningbo during autumn 2007 Established Business License April 2008 Recession 2009 Today we are approx. 100 employees
Investigation Decide what you want to do in China: Sell to China? Buy from China? Manufacture in China? Provide Services in China? Where to be located? Where are your customer located? Logistics / Transportways? Possibilities to get competence in the area?
Business License Registered Capital Minimum of 100.000 USD. 20% to be injected within 3 month from registration and the rest within 2 years WFOE Production company Limited possibilities to sell material from WFOE FICE Trading company Service company Legal representative All signing in China will be made by the Legal Representative (one person) and the General Manager (GM can t sign everything)
Business License Exit/Entry strategies Tax regulations Avoid consolidation Mother AB Manufacturing Holding AB Trading Holding AB Service Holding AB WOFE Co Ltd FICE Co Ltd FICE Co Ltd
Loans Total investments Registered Capital Loanmax RC + LM RC LM USD 0,1-3 Million 70% 30% USD 3-10 Million 50% 50% USD 10-30 Million 40% 60% USD 30 Million + 33% 67%
Customs Long time for the custom process in the beginning Plan for the material to be one month in custom!! Important that Components and Products have the correct HS codes All HS codes are priced differently for duty Make sure you have all documents needed for custom You are not allowed to pay invoices that don t have correct custom declaration paper Bonded Warehouse Be your own custom Save the duty (amount depending on HS code but at least 7%)
Invoices Customer invoices Invoices from your own ERP-system VAT-invoice made at Tax Bureau (ex. once a week) Need to go physical to Tax Bureau Customers on Export need to pay invoices within 90 days If not on day 91 you need to pay 17% VAT Supplier invoices Payment terms is often prepayment in beginning Suppliers abroad can not be paid until customdeclaration paper is OK Foreign Currency Bureau decides if the invoices are OK to be paid
Employees Contracts Normally probation time 3 month Time limited contracts (ex. 3 years) Titles Several different levels, easy to missunderstand Set up your demands Average monthly salary: Blue collars: 1500 2000 RMB White collars: Depending on level/title From 2500 RMB Social cost for chinese employees around 35% - 45% Special to note: Normally - Companies pay lunch for all employees (around 7-12 RMB/day/person) Normally - Companies arrange bus to factory or pay for the expences for local bus (around 100 RMB/month/person) Normally Companies pay a yearly bonus to all employees (monthly salary) Peoples often leave companies (High staff turnover) Time for maturnity leave is 3 month
Tax & VAT VAT Note Domestic, Sales & Purchase 17% Export, sales 0% Export, Purchase VAT refund 0-17% HS Code, Cash Other taxes Business tax (charged to services) 5% Profit tax 25% Capital gain tax 20% Withholding tax 10% Property tax 12% Losses Carried Forward 5 years
NRPV - Non refundable purchase VAT (NRPV) tied to Export Sales - Calculation different in FICE and WFOE Example FICE WFOE Income 1 000 1 000 Material -500-500 5% NRPV -25-50 Gross Profit 475 450 Purchase VAT = 17% x 500 = 85 Purchase VAT refund FICE = 85-25 = 60 Purchase VAT refund WOFE = 85-50 = 35
NRPV Customer (Export) FICE Co Ltd Supplier (Domestic) WFOE Customer (Domestic)
Others Transfer Pricing Transfer Pricing Sales, Market price 100 Sales, "Mother company" 40 GAP 60 Profit tax, 25% -15 Withholding tax, 10% -6 Agreements between Group companies if any services will be invoiced
Advice on your way. Put in your best employees into China. It is a really complex country to do business in Plan for time consumption Hire experts in China with solid China experience Different regulations in different provinces. Local practies! Do not save money on Chinese middle management they are your eyes and ears in China
Advice on your way. Make sure that your customer is ready to do business in China Make ageements on special pricing during transfer period Is it any Internal fights at your customer regarding Europe vs. China? Learn about the Chinese culture Build Relationsships!!
THANKS! pno@rimaster.com