The different levels of economic development and the intense competition for investment among Asian countries present unique opportunities as well as challenges when you are structuring your operations in the region. Identifying and assessing such opportunities and challenges can be tricky, especially if you have to navigate through the myriad of regulatory requirements and practices.

Bryan Cave International Consulting (“BCIC”) has an extensive contact network in Asia, the depth of market knowledge and the strength of technical expertise to guide you through the development of an optimal business plan for the Asian region and for individual Asian markets. Whether you want to identify and analyze various options for locating manufacturing, distribution/procurement, administrative, treasury and other business functions, examine bonded zones, bonded warehouse schemes, special economic zones, free trade zones and export processing zones, or develop cost-saving strategies that capitalize on the various domestic incentive schemes, as well as international trade rules and free trade agreements (“FTAs”), BCIC’s consultants have the strategic and operational credentials to help you advance your objectives.

It is normal practice for companies to conduct legal and financial due diligence review of a company they intend to enter into partnership with or acquire. However, if the target company trades goods across borders, is located with a special zone or manufactures under special customs conditions, then we strongly recommend a customs and trade due diligence to be completed as well.

The Customs and regulatory authorities have the capability to impose strong penalties, recover outstanding revenue and/or withhold/suspend permission to conduct certain activities; such actions can severely impact business operations. As such, what may look like a good deal on the financial and legal fronts may not be so rosy when you look at the target company’s history with the Customs and other regulatory authorities and its actual trading documents and practices. Being alerted to any potential exposures allows you to make a more informed decision on your acquisition or partnership.

Our team at Bryan Cave International Consulting (“BCIC”) can assist you in conducting customs and trade due diligence; this can be done simultaneously and will complement legal and financial due diligence.

Customs authorities across Asia have increased their enforcement activities, whether through random border checks, post clearance audits or targeted audits based on information from whistle blowers.

Bryan Cave International Consulting (“BCIC”) assists businesses who choose to be proactive, to conduct full compliance review of their operations in Asia. The review can cover every facet of import/export activities and customs supervised manufacturing processes, identifying potential exposures as well as areas for potential duty/cost-savings.

We use detailed questionnaires, factory walk-throughs, one-on-one interviews, and document and process reviews to obtain a comprehensive picture of your operations. We cover documents, such as your business licenses and permits, distribution/sales agreements, transfer pricing study, and your processes, such as how you classify goods for Customs declaration purposes, how you determine the declared value of goods, how you retain records, and how you select and supervise your logistics providers and customs brokers.

Our consultants are well versed in the domestic regulations and practices and have excellent advocacy skills that can be employed in dealing with exposures and defending against challenges from the Customs and other regulatory authorities. 

While integrated with the business’ global platform, internal controls and quality assurance procedures should also be customized to ensure full compliance with the customs and trade regulations of the country in which you operate.

Bryan Cave International Consulting (“BCIC”) has extensive regulatory knowledge and operational expertise to assist you in developing in-house customs and trade compliance programs which are user friendly and can manage and reduce the risk of violating domestic regulations. Just as important, BCIC can work with and train your personnel so that they are fully conversant with all the domestic regulatory requirements and that they understand the importance of compliance. 

As your business transcends borders, expanding into numerous jurisdictions, tax issues will become increasingly more complex. When you trade goods, intangibles and services across borders between related entities, there is a real need for you to place greater emphasis on ensuring that your transfer pricing policies are both tax efficient and tax effective from a direct and indirect perspective. However, transfer pricing has traditionally focused on direct tax; indirect tax (or customs valuation) is normally not a major factor in transfer pricing.

Furthermore, with the increase in direct tax enforcement in many countries across Asia, you will likely have, on-site, many financial and other documentation that are required by the direct tax authorities. These documents offer Customs audit teams a great opportunity to get a bigger picture of your operations, not only in-country but also globally. Payments such as management fees, royalties and other fees are open to examination as are any extra payments made to other subsidiaries of your parent company. The Customs authority will scrutinize such payments, as well as tangibles and intangibles that are not considered for direct tax purposes, to ensure that the correct value is set for customs duty purposes. 

Bryan Cave International Consulting (“BCIC”) has a team of consultants with a wealth of experience and knowledge in the area of customs valuation. We can work with you to ensure that the customs value of your product is fully compliant with the precise set of rules for the valuing of all imports and exports and in respect to related party transactions. We can also advise you on the proper structure of your royalty agreements to ensure that any items of the royalty payment which can be legitimately left out from the customs value of the good are so excluded.