Before buying into a domestic enterprise in mainland China, especially state-owned enterprises, foreign investors should be aware of the tax implications of any reorganisation in the target company.
Under its World Trade Organisation agreement, the Chinese government has promised broader access to its markets. Even some previously prohibited industries, such as telecommunications, are expected to open up to foreign investors. These newly opened markets are dominated by state-owned enterprises (SOEs), which have extensive experience in the local market. Some have also created brands that have become household names in China.