The Feasibility Analysis Which LELP Environmental Establishes An Investment Company In China

The finance and taxation departments of Multi-National Corporation will always focus on the country’s fiscal policy and its changes during the whole process of investment and operation. According to local policy and its changes, the Multi-National Corporation make new design or adjustment to relevant investment structure, investment&financing methods and capital structure; and realize the financial objectives of shareholder profit maximum through effective tax planning methods such as thin capitalization.After the implementation of " Enterprise Income Tax Law of People’s Republic of China " in2008, Chinese government levied domestic and foreign enterprises25%for Corporate Income Tax, and levied Non-resident enterprises20%for withholding tax on dividends. But only levied5%for a few countries and regions, which signed a special tax agreement with China, such as Hong Kong. Except above conditions, the tax rate is10%. This prompted foreign investors to explore the reorganization of its investment mode in China, and seek the best way to replace the previously used BVI Offshore company investment path.LELP is one of the foreign investors. He starts investment in China from2008. His tax department immediately began to study how fiscal policies combined with relevant mainland Chinese companies to invest in China to make the optimization of operating mode in the middle of2009.This article study the feasibility witch LELP environmental sets up an investment company in China from the perspective of finance&taxation. After the introduction of related theory and policy, this article analyzes the example of LELP from three levels. Firstly, company background introduction and problem analysis for original mode; secondly, Foreign Investment Enterprise framework construction, recombined tax analysis and the choose of alternative city;thirdly, After the analysis of the new model in a single investment, financing, taxation aspects, this paper using the discounted payback method and profitability index analyze the comprehensive benefit witch established the foreign investment company.Finally, drawn the feasibility which LELP environmental establishes an investment company in China, and this mode has the reference value of similar company.