First, the Reality: No New Tax Reductions Since 2019
Corporate tax and other tax reductions for foreign-invested companies were abolished for any new reduction applications filed on or after January 1, 2019. Only companies that applied for a reduction by December 31, 2018 can still receive it. If you're setting up a new company, it's more realistic to look into cash grants and other forms of support instead of tax reductions.
How Incorporation Works
Ongoing Filing Duties
Tax Advantages for Foreign Investors & Reps
Look into cash grants and other support instead of tax reductions
There are no new tax reductions since 2019, but depending on your industry and investment size, you may still qualify for cash grants or other separate support programs — worth checking in advance.
Optimize the CEO's personal income tax separately from the company
The CEO's own wage income can be reviewed separately from the company's corporate tax, checking whether it qualifies for the 19% flat-tax option or the engineer tax reduction to choose the best approach.
Having transfer pricing documentation ready lowers audit risk
Documenting the terms and pricing basis of transactions with your parent company from the start greatly reduces the burden of proof if a tax audit happens later.
The Most Common Mistake We See
Some clients rely on outdated information and expect a corporate tax reduction, only to find out too late that it was abolished after 2019. Others trade with their parent company without transfer pricing documentation and then struggle to explain themselves during a tax audit.