Over the last twenty years China has experienced rapid economic growth with multi-stage market reform to become the world's second largest economy behind the United States.
There is considerable scope to use Ireland as a platform for investing into China. The attractions of using Ireland include:
- Competitive cost base – significant competitiveness improvement
- English speaking
- Young, dynamic and well educated workforce
- Common law legal system
- Various withholding tax exemptions for interest and dividend payments
- The combination of the Ireland China Double Tax Treaty (DTT) and the use of Irish investment vehicles make Ireland a very favourable location for companies planning to invest into China or elsewhere.
- No Irish or Chinese capital gains tax on the disposal of Chinese shares.
- A reduced rate of withholding tax of 5% on dividends paid from China to Ireland under the DTT (provided a minimum 25% shareholding exists).No withholding tax on dividends from Ireland to China.
- Incentives for employees working in China
Similarly, Ireland is an ideal location for establishing activities outside of China. In addition to the above, the attraction of using Ireland to expand activities outside of China include:
- Gateway to Europe
- Member of the Eurozone
- Single Financial Services Regulatory Authority
- 12.5% corporation tax rate on trading profits
- Attractive investment management regime
- Extensive tax treaty network
- 37.5% relief for R&D activities
- Attractive intellectual property regime
- Relief for certain start-up companies
- Incentives for employees relocating to Ireland
KPMG range of services
KPMG Ireland has a team focused on investment into and out of China. Together with our colleagues in KPMG China, we provide our clients with complete tax advice on the issues that arise. Our tax services include advising on:
- Investing in Ireland and China
- VAT and global indirect taxes
- Transfer pricing
- Personal and corporate tax compliance services
- Payroll taxes