Intertrust: Today business knows no borders

Eestablished in 1952, Intertrust is a quality leader in trust & corporate services, providing a broad range of legal, tax and administrative services to international as well as local companies and high net worth individuals.

Intertrust provides broad range of services including corporate services, trusts, business and outsourcing services, taxation, fund as well as China services.

In a recent interview, David de Buck, CEO of Intertrust Group, and Alex Cho, managing director of Intertrust Hong Kong and the Chinese mainland, shared their overviews on Intertrust's development.

"With 1,000 people or more, working from 30 plus offices in over 20 countries, we have the local knowledge and cultural understanding to serve our clients. Being in Asia since the late 1980s, we have gained some Asian DNA as well," David said, "Within Intertrust we have over 30 different nationalities working together. The variety of perspectives helps us provide creative solutions for our clients."

"We have built a strong network in the Chinese mainland. We began by focusing on inbound business, but in the past two years, we have helped Chinese companies expand overseas,"Alex said.

Professional advice

"You can look at us as a specialized corporate services company - not just here to transfer and implement book knowledge, or do what we're told blindly. We're here to anticipate and solve our clients' problems, to act quickly and responsibly," David said.

Intertrust has always had close ties to the financial world and they understand what financial arrangements will be best suited to the structures they set up for their clients.

David said: "We have noticed that clients need help when they acquire foreign companies, make foreign investments, or expand their own operations by setting up offices in other countries. We can help them with the incorporation of their company, to setting up structures, to steady growth, to global expansion. We can even run their entire office administration for them, all over the world."

As an example Alex said that if a Chinese company wants to do business in Europe and picks Germany as the target country, Intertrust will advice them on the business environment in Europe and liaise with the clients other advisors on what will be the best structure. Directly investing from China to Germany or consider to use holding companies in Europe.

"From day one, we can advise on the best country to set up in. It is very important to decide the right structure from the beginning because it is difficult to change later on,"David said.

Some clients from the Chinese mainland use Hong Kong as the gateway, setting up a structure in Hong Kong first and then branches in other countries.

Alex said that according to statistics, many companies who want to enter the Chinese mainland market set up a holding company in Hong Kong. Conversely, lots of Chinese companies use Hong Kong as the first step to invest overseas.

Alex said: "In structuring the investments of our clients we anticipate future expansion and not just the direct investment. It's all about the set up of the best suitable business structure for further expansion."

The most important factor for Chinese companies doing outbound business, especially in Europe, is to know what their targets are and to understand local rules and regulations, said Alex.

"What helps the Chinese companies is that due to their cultural background, they usually have long-term plans and strategies. If necessary we can provide companies with a professional team to be their accountants or even with a director to manage the company,"David said.

Rules and regulations in China are quite different from those in Europe. Intertrust provides professional advice on how they should get in touch with the local governments, banks, and lawyers. "We provide them with all the legal, financial and tax information they might need,"Alex said.

Global competitor

"Globally, we serve 60 percent of the Fortune 500, and also have small and medium sized clients with international operations covering energy, resources, travel, manufacturing, telecommunications, and IT,"David said.

With a network in 22 countries of more than 1,000 people, Intertrust is in the top three globally of trust and corporate services providers.

David said that a strong competitive advantage of Intertrust is that "we have extensive knowledge within our group about global tax treaties and by our global network we are present in all the major countries. In the countries we operate in we know the best lawyers and tax advisers. We are familiar with the different regulations and legal environments."

Alex said: "All the structures are set up according to relevant tax law. What we focus on is showing our clients about how to minimalize tax payments by making an efficient use of tax treaties between countries."

"Countries agree a tax treaty to avoid double taxation. We make sure that companies understand the assistance tax treaties can provide," David explained.

Commenting on the investment environment in Europe, David said, there is an economic slowdown that, in fact, creates opportunities for Chinese companies to do outbound business because there is a need for money. Investing is a long-term activity and David thinks it is a good time to invest now.

Globalization is increasing and there is much cross-border interaction. However, differences between Chinese and Western culture might be a barrier for Chinese companies doing business in Europe.

David said that once a company knows where it wants to go, then it is important to help it with cultural issues to bridge the always existing cultural gap. Culture is a factor that influences other aspects of the business from financing negotiations to hiring staff. Intertrust is a global firm but building on local knowledge is an important aspect of their client service.

Chinese companies overseas

"We established an office in Hong Kong in 1987 and have been in the Chinese mainland since 2001 when we opened an office in Shanghai. Afterwards we opened offices in Beijing and Guangzhou in 2005,"Alex explained.

So far this century, there has been much foreign direct investment in China. This came from Europe, the US, Hong Kong and China Taiwan in particular and Intertrust has been involved in assisting many of those multinational companies.

Now, China is still attracting investment from Western countries but at the same time many Chinese companies started investing abroad. "Chinese companies looking for outbound business will have to do their homework to decide what is the best opportunity,"Alex said.

Even some companies that have been successful in China lack knowledge when they do business in the overseas market. Hundreds of Chinese companies have asked Intertrust for assistance.

"If Chinese companies want to invest in Europe, Intertrust can provide valuable advice," David said. "We help before they set up companies to find the place and people they need. Also Intertrust can help with licenses and administration."

Statistics show that the number of independent investments by foreign investors in China is increasing more than that of joint ventures in the past 20 years. Alex said that the reason for this, in the Chinese mainland, is that some industries once were not allowed to be wholly owned, so they had to be joint ventures. Now, it is much easier for investors to do businesses themselves. Intertrust is a good example of this. It used to have a joint venture in the Chinese mainland, and held just 40 percent. "Last year, we purchased the other 60 percent. We developed from a joint venture to a wholly owned subsidiary," David said.

David explained the reason why Intertrust did this was that "we are confident in our capability and have tremendous belief in the growth of the country and think that opportunities do exist. If you have strong belief and the law allows you, you could have 100 percent instead of a joint venture."

Other reasons why more Chinese companies are going abroad include flexible policies implemented by the central government, and a better investment environment in some areas. Among the clients of Intertrust, some Chinese companies are increasingly interested in acquiring brand names in the overseas market, Alex said.

For further information, please feel free to visit www.intertrustgroup.com to learn more about Intertrust's global service offerings.