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Chinese Chamber of Commerce of Brazil held the 130th Canton Fair promotion event in Brazil

The China Import and Export Fair, also known as the Canton Fair, started in 1957, is held biannually in Guangzhou, China. The event is organized by the China Foreign Trade Center, sponsored by the Ministry of Commerce of the PRC and the People’s Government of Guangdong Province.

It is also China’s leading commercial promotion platform and directly connects domestic and international markets. The Fair is an extensive international trade event, with a wide variety of products, participation of buyers from various countries, and represents a significant turnover for China.

On 21 April 2021, during the Special Latin American Session of the 129th Canton Fair, the Deputy Director and General Secretary of the Fair, as well as the Director of the Center for Foreign Trade signed a cooperation agreement with the Chinese Chamber of Commerce of Brazil (CCCB). Alongside the CCCB, the Industrial and Commercial Foundation of Argentina, Chile Hongzhan Group, and the Colombian Chinese Chamber of Investment and Commerce also joined the agreement.

CCCB President Daniel Manucci attended the event and said the CCCB had witnessed the development of cooperation between Brazilian and Chinese companies. With this, Manucci signed the cooperation agreement with the Center for Foreign Trade and formally joined the “Canton Fair Global Partnership Program”. This partnership established in the previous edition extends until the 130th edition of the Fair.

Since its inception, the Canton Fair has adhered to reform and innovation. Overcoming several challenges and never being interrupted since 2020, Canton Fair has been transferred to the Internet due to the violent global pandemic of COVID-19 and a severely damaged global trade. In 2021, the Fair returned to face-to-face meetings.

With this in mind, the Chinese Chamber of Commerce of Brazil offered support to Brazilian companies wishing to visit and explore the opportunities provided at the Canton Fair on-site, with the help of our local partner, CW Group.

On 18 October 2021, CCCB held a promotional event at the 130th edition of the Canton Fair. This edition marks an important milestone, since it is the first edition of the Fair with a hybrid format, working in a face-to-face and virtual way.

The event was attended by the Consulate General of China in Rio de Janeiro, the China Trade Center Group, INDI MG – Agency for The Promotion of Investment and Foreign Trade, and ABCasa. On behalf of the CCCB, we had our General Manager, Arthur Guimaraes, and the moderation of the event was made by our Project Coordinator, Lara Cordeiro.

This Article is contributed by the Chinese Chamber of Commerce of Brazil.

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The Launch of Our Virtual Colombian Pavilion

Colombia is a country that offers an expansive range of products and brands that prove to be very attractive to Chinese consumers. However, one of the main challenges is how to reach that market competitively. In this sense, e-commerce has become a valuable tool that facilitates direct-to-consumer (B2C) marketing. 

To speed up, facilitate and promote the access of more products and brands to the mainland Chinese and Hong Kong market, MHnCW, together with the Colombian China Chamber of Investment and Commerce and the support of ProColombia, has made the decision to create the first virtual Pavilion of Colombian products in China available for Chinese consumers to purchase directly. The Colombian Pavilion is a unique initiative that will allow Colombian companies to exhibit their products to millions of potential consumers in China.  Sectors involve food, cosmetics, leather products, handicrafts, clothing, and accessories, among many other categories.

MHnCW offers the possibility of accessing a broad portfolio of online channels (cross-border e-commerce platforms) and offline (physical stores in Hong Kong) that will be presented jointly with the image and concept of the Colombia Pavilion. Thus, this project hopes to become a pioneering example for other Latin American countries. 

On 28 July 2021, 7:00 PM Colombia Time  / 29 July 2021 08:00 AM Hong Kong Time, our Colombian Pavilion was officially launched via an online event. We have released the details and requirements to join the Colombian Pavilion.  

Joined with us were:

  • Ambassador of Colombia to China Mr. Luis Diego Monsalve
  • President of the Colombian China Chamber of Investment and Commerce Dr. Carlos Ronderos
  • Director of the Colombian China Chamber of Investment and Commerce Mr. Jaime Suarez
  • Director of ProColombia (China Region) Ms. Natalia Tobon

For more information, don’t hesitate to get in touch with our Colombia Representative David Barriga:

Email: david.barriga@cwhkcpa.com
Instagram: mhncw_es
Whatsapp: + 57 311 5632128

Written by David Barriga, CW CPA

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5.4

STARTMEUPHK and CW: On the Way to Consolidate Hong Kong as a Hub for Technology and Innovation Companies of the World

Hong Kong, the Asian financial and trade center, consolidates itself as a great beacon for innovation and technology. This makes it idealistic for foreign companies interested in increasing their competitiveness and accessing the Mainland China Market. StartmeupHK is an Invest Hong Kong initiative that seeks to facilitate the entry, establishment, and permanence of foreign technology companies so that they take full advantage of the benefits offered by Hong Kong’s innovation ecosystem, one of the most advanced in the world. 

Every year, StartmeupHK holds a great event to bring together experts, service providers, financial institutions, investors, and all kinds of companies related to the management of technology startups.

During this year’s occasion, the specialized event focused on the Latin American region. On 10 June 2021, a webinar was organized with 12 expert specialists and a panel of foreign startup companies. David Barriga, CW’s representative for Latin America, presented the closing remark for the international event.

Learn more about the webinar: https://www.startmeup.hk/salons/s-america/

Highly committed to developing innovative companies, CW offers a package specially designed for startups that facilitates their constitution and management in Hong Kong and creates their wide network of contacts with Hong Kong entities involved in the innovation ecosystem. If you are interested in more information about our services for startups, do not hesitate to contact us.

Written by David Barriga, Latin Department, CW CPA

 

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Electronic Audits by the Customs Authority in Mexico

Based on the Customs Valuation Agreement of the World Trade Organization, the customs authority of any country has the power to doubt the veracity of the information presented regarding the value of imported goods. In this sense, following the faculty granted by the mentioned International Agreement, the Mexican customs authority has determined the causes that will take into account to reject the customs value of imported goods. The table below shows a summary of some of the most important causes:

Accounting of the Mexican enterprise

Documents provided by the suppliers aboard to the Mexican importer​

The importer opposes the exercise of the verification faculties of the customs authorities, or it is detected that the importer has incurred in any of the following behaviors:

  1. Not keeping the accounting, or not keeping it according to the principles and legally applicable precepts; not make the accounting available to the customs authority.

  2. Omitting or altering the records of foreign trade operations.

  3. Omitting the presentation of the tax return exercise of any contribution until the moment at which the exercise of verification faculties begins.

  4. Not meeting the requirements of the customs authorities to present the documentation and information proving that the declared value was determined according to the legal provisions.

If it is established that the value declared by the importer was not determined following the customs laws, upon updating any of the following assumptions:

  1. In the documentation or information provided to justify the customs value of the merchandise that has been declared, it is not possible to corroborate its veracity or accuracy. In the case of having used the method of the transaction value for their determination, it is not reliably proven the price that was actually paid or will be paid for the mentioned merchandise;

  2. Any payment not justified to suppliers and exporters of the merchandise is detected in their accounting. It is known, derived from an international certification, that the alleged supplier of the merchandise did not make the sale operation to the importer or denies having issued the invoice presented by the importer in the petition; or

  3. When the value declared in the petition is 50% or lower than the transaction value of identical or similar goods determined following the customs laws.

RISKS

The Mexican tax and customs authorities will have full faculty of electronic revision. They will be able to review all payments made abroad related to the purchase of foreign merchandise imported into Mexico.

In this sense, the situation becomes delicate when the Mexican customs authority reviews the movements of money abroad and when the movements of money do not exist in the accounting records or are not justified to the satisfaction of the mentioned authority. Then, there will surely be a rejection of the customs value of the merchandise, which could lead to the omission of taxes, having to be paid along with their accessories, and the consequent payments of the corresponding fines.

OUR SUGGESTION

In the case that your enterprise has branches in Mexico, such as trading companies or manufacturers, we recommend you to ensure that accounting is carried out following the applicable legal principles and precepts; make correct payments abroad that are related to merchandise imported into Mexico and relate them to the accounting entries, to avoid unnecessary inconvenience from the Mexican tax and customs authorities.

If you have any questions about the incremental or decrementable concepts that must be declared in the import petition or the accounting, please do not hesitate to contact our team of professionals.

Written by Baker Tilly Garza García, 

Members of Allinial Global 

Baker Tilly Garza Garcia

 

Contact

Monterrey Office 

Jorge Hernandez Parra

Email: jhernadezp@btmgg.com.mx

M: +52 1 81 8396-3872

Alejandro Angeles Acosta

Email: aangeles@btmgg.com.mx

M: +52 1 81 1707 5378

 

Querétaro Office

José Ángel Blanco M.

Email: jblanco@btmgg.com.mx

M: +52 1 56 1584-0019

Juan Carlos Castro

Email: jcastro@btmgg.com.mx

M: +52 1 442 154 99 54

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CW signs an MOU with the Universidad Tecnológica de San Juan del Rio (Mexico) for launching a virtual internship program

Our firm signed an important collaboration agreement with the Universidad Tecnológica de San Juan del Rio (UTSJR) to improve the skills and abilities of students through professional practice in various aspects such as business development and information and technology in an international company with a focus on the Latin American region. 

This new project aims to promote direct contact, educational and research cooperation between students and the company. Furthermore, both parties will endeavor to cooperate in various fields of interest: joint education activities and exchange of information and publications.

In total, eight Mexican students were selected for the virtual internship program.  These students are from engineering, IT, and business background, eager to carry out professional work in an international environment.

For further details, please contact our Latin Department Assistant Manager, Victor Herrera, at victor.mendoza@cwhkcpa.com.

Written by Victor Herrera, Latin Department, CW CPA

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Podcast

CW Latin Department Launching a Podcast in Spanish

To offer morinformative and practical content to its Spanish-speaking clients on issues related to establishing, maintaining, or strengthening commercial and investment operations in mainland China and Hong Kongwe are pleased to share with you the opening of a new communication channel – a business podcast in Spanish, operated by our Latin American Representative, David Barriga.  

In the first episode of our podcast, we invited our special guest, Verónica Medina, Representative of Invest Hong Kong in South America (except Brazil), to share her interest and efforts in attracting investors from Latin America to Hong Kong. The interview with Verónica serves as a prelude to our upcoming series of episodes on practical aspects to establish a company in Hong Kong, key considerations to open a corporate bank account, costs, and actions needed to maintain a  Hong Kong company.  

Currently, our Latin Department has established accounts on various social media platforms such as Instagram, Facebook, YouTube, and Linkedin, providing instant communications with our Latin American and Spanish followers. The inclusion of a Spanish podcast channel is a major milestone for our Latin Department to becoming a top-of-mind service provider and connector of knowledge, network, and social impacts to our communities.   

To those Spanish-speaking executives, managers, and business owners who are doing business with China: If you would like to keep you updated on the best practices for dealing with China businesses, please access our new podcast channel both on Spotify or iVoox.  

Spotify: 

https://open.spotify.com/episode/64LtB35kt2jW3JKSGHw4Fu?si=nFkpqLZrRiy2TpfJh1tdkw  

iVoox: 

https://go.ivoox.com/rf/68457104 

Written by David Barriga, Latin Department, CW CPA

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E-commerce

Webinar: How to Develop Business Models through E-commerce

On 25 February 2021, CW organized its first webinar dedicated to the importance of E-Commerce, with the support of two Allinial Global member firms – LawBiz of Mexico and Alfredo Lopez y Cia of Colombia.  

The online webinar with specialists and experts from Chile, Colombia, and Mexico attracted over 150 participants. Specialists from various regions presented their insights on why companies today should pursue the digitalization of their operations and incorporate B2C and B2B virtual processes to market their products and services. The renowned entities included Concanaco from Mexico, Invest Hong Kong, Bogotá Chamber of Commerce, Lawbiz, Alfredo López y Cia, and the Colombia China Chamber of Commerce. 

The webinar encapsulated E-commerce’s importance in the development and growth strategies for small and medium-sized companies in Latin America. The growth and impact these channels have had on economies such as China and other Asian countries are clear signs that are now more important than ever.  It is necessary to accelerate the process of adopting new technologies and especially the use of electronic channels.  

The webinar’s key takeaways included the need to link universities with SME’s innovation processes, the role of social networks as a mechanism to generate knowledge, the importance of human resources, and their update in the face of technological innovation. The adoption of online platforms is necessary for companies in various industries; even governments have adjusted tax and legal procedures electronically. 

In this sense, CW presented its new service portfolio provided by MHnCW as an integral solution to Latin America companies that seek to export or sell their products to the mainland Chinese and Hong Kong markets.  Please visit our website: www.mhncw.com

For more details of the webinar and access to the event’s full recording, click here: https://youtu.be/0SWt_veNZc0

 

For more information, 

David Barriga 

Representative CW/MHnCW for Latin America 

David.barriga@cwhkcpa.com 

Written by David Barriga, Latin Department, CW CPA

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Beautiful Brazil

The diplomatic relationship between Brazil and China began in the 19th century. This relationship became closer in the ’90s due to a more complementary commercial approach. Since 2009, China has been Brazil’s leading trading partner. The economic connections between the countries have brought them closer despite the great geographic distance.

Brazil is a crucial commodities supplier, whereas China provides mostly raw materials, supplies, and machinery to Brazil. China additionally plays a vital role in the Brazilian economy since it buys more than it sells. Since 2010, China is also responsible for heavy investments, especially in energy and infrastructure. In 2019, China invested USD 1.9 billion in Brazil, following the Chinese government commitment made at the 11th BRICS summit in Brasília to invest UDS100 billion.

From January to October 2020, 21.6% of all products imported to Brazil were from China. According to Mr. Yang Wanming, Chinese Ambassador to Brazil, more than 300 Chinese companies invested in Brazil, of which 25 ranked in the top 500 companies globally. The closer connections between the two countries are even more evident now with the joint efforts to elaborate a vaccine against COVID-19.

China considers Brazil as a strategic partner. This scenario presents an opportunity for Brazilian companies that want to expand their businesses to China, even more so after the country’s new Foreign Investment Law came into effect last year, which aimed to make foreign investments in China safer and easier.

Establishing a business in China can present a range of strategic benefits to Brazilian companies, especially to those that wish to partake in product import-export services or establish their operational focus on the Chinese market, from preparation to the distribution of their products services. Although not every company has the same needs, we list a few benefits of establishing a company in China:

  • Access to foreign investment protection as a China-based entity
  • Obtain Chinese-speaking skilled workforce
  • Closer contact with Chinese suppliers
  • Access to one of the biggest consumers markets in the world

Understanding the potential of these fruitful economic relations between Brazil and other Latin American countries, Mr. Thomas Wong, Partner of CW CPA, established a team entitled ‘Latin Department’ to serve Spanish and Portuguese-speaking clients. One of CW’s differentiating factors is that we offer experienced native-speaking advisors that attenuate the cultural differences, thus making the navigation through the complex Chinese market smoother.

To date, our Brazil Desk is a division under the Latin department, assisting various sizable Brazilian companies operating in China, with two Brazilian advisors, namely Kemelly Vera and Rafael Fraga. Our Brazil Desk focuses on international retailers, technology equipment manufacturers, and medium-sized traders that are sourcing components from mainland China. If you are looking to capitalize on China’s market opportunities, please contact our Brazil Desk:

Kemelly Vera | LinkedIn profile

kemelly.vera@cwhkcpa.com

Rafael Fraga | LinkedIn profile

rafael.fraga@cwhkcpa.com

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Mexico

Market Explorer Webinar: Business Opportunities in Mexico

Hosted by the Hong Kong Trade Development Council, the webinar “Business Opportunities in Mexico” provides insights into Mexico’s current investment situation. Focused mainly on companies settled in the Greater Bay Area and targeted at expanding their operations to North America, the presenters provide invaluable perspectives, including the latest development of the Trade Agreement with the northern neighboring countries of Canada and the USA, important economic data in terms of trade, Gross Domestic Product and business environment.  

The presenters include Charlotte Man, Economist from HKTDC; Susana Munoz, President of MexCham Hong Kong; our PartnerThomas Wong and our colleague, Luz Martinez. We are delighted to share a specific case study of a Chinese company investing in TijuanaMexico. This case has also discussed the USA border’s strategic positioning as a significant commute during the startup process in Mexico.   

Click here to watch the full webinar  

http://pp.hktdc.com/dm/169934/Webinar_en.html 

Written by Luz Deneb Martinez, Latin Department, CW CPA

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ECUADOR

SAS (SOCIETY OF SIMPLIFIED SHARES) IN ECUADOR

On 28 February 2020, the Organic Law of Entrepreneurship and Innovation was published In Ecuador, which establishes for the first time the definitions and mechanisms for the creation, control, and procedures of SAS in Ecuador. On 25 September 2020, Simplified Stock Companies’ regulation was issued to establish the determining points of this type of companies. 

 

DEFINITION OF A SAS 

It is a type of authorized company in which the creation procedures and the costs associated with said procedures are simplified. Its objective is to formalize and regularize the enterprises, for which it was formalized in the Organic Law of Entrepreneurship in Innovation. 

One of the advantages is that they favor simplifying the process, such as the preparation of deeds, additional notarial acts, face-to-face and limited acts that previously prevented the creation of new companies due to the lack of resources to be able to carry them out.  

The SAS are companies born in response to a purely commercial need, and this situation limits the company’s ability to have financing resources such as entering the stock market. The solution to be able to quote would be to change the company’s name according to the requirements to be able to do so if the company so wishes. 

 

REQUIREMENTS TO CONSTITUTE A SAS 

The essential requirements to constitute a SAS are the following: 

  • Electronic certification of shareholders: It should be noted that, for this type of electronic documentation, it is necessary to previously obtain an electronic signature among the types of entities that provide this service of authorized electronic signatures are Central Bank of Ecuador, Security Data, AnfacAuthorities of Certification Ecuador CA and the Council of the Judiciary.  
  • Domain reservation: For this, it is necessary to previously create a user on the page of the Superintendency of Securities and Insurance Companies, or if you have one, enter the corporate sector, with the username and password, then choose the option to reserve domain, enter the constitution option and follow the steps indicated by the system to generate a document, which must be printed at the end of the reservation process. 
  • Additional documentation: To finalize the process by the user, it is necessary to download and fill out the registration forms,such as the contract, appointments, and registration forms. Said documentation can be found on the Superintendency of Securities and Insurance Companies’ website when entering the “User Guide”  It should be noted that all these documents must be signed electronically by the natural or legal persons that will make up the SAS. Later they will be sent to the email address of the corresponding office.  

Once the previously indicated procedures have been complied with, a validation review will be carried out by the company registration area, which will be in charge of completing the registration process once all the documentation has been completed. 

 

CAUSES OF DISSOLUTION 

Unlike those of the other types of company or company names, an SAS recurring losses for at least the first five financial years are not considered as grounds for dissolutionHowever, the following points are considered as grounds dissolution:

1. Failure to comply for three financial yearswith the provisions of article 20 of the Companies Law, which indicates the following: 

  • Balance sheet, statement of profit and loss accounts, reports and reports of the administrators of inspection bodies duly approved by the General Meeting of Partners and Shareholders, as the case may be; 
  • Payroll of administrators, legal representatives and or partner and shareholders in accordance with international standards of transparency in tax matters and the fight against illegal activities; 
  • Other types of information requested by the control body.

2. Expiration of the term of duration of the SAS, indicated in the company’s bylaws unless an extension is established by means of registered documents before its expiration, and; 

3. Bankruptcy order of the company, legally enforceable. 

To these grounds for dissolution, all those provided by the Company Superintendent will also be added, as long as any of the following situations exist: 

  • Manifest impossibility of fulfilling the corporate purpose for which it was established, or when it is definitively impeded, due to factual or legal circumstances, from carrying out any operational activity; 
  • The activities for which it was established would have concluded when its statute would have limited its operational capacity to one or more business activities; 
  • Non-compliance with the Law, the regulations, resolutions,and other regulations issued by the Monetary and Financial Policy and Regulation Board or the Superintendency, as appropriate, or the bylaws of the company;  
  • Intervened companies that refuse to pay the auditor’s fees or do not provide the facilities for him to act; 
  • Impediment or difficulty for corporate control inspections, in accordance with the provisions of article 440 of the Companies Law; 
  • Has not overcome the causes that motivated the intervention of the company, after a report from the Superintendency’s control area recommending the dissolution; and 
  • According to its financial statements, the company records operating losses that amount to 50% or more of its equity. 

If you need further information, please contact Mr. John Hidalgo, Director of AUDIT TAX CORPORATE (www.auditcorporate.com) via jhidalgo@auditcorporate.com 

Written by Mr. John Hidalgo, Director of AUDIT TAX CORPORATE, a member firm of Allinial Global in Ecuador 

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