Merger & Acquisition
What separates a successful China deal from the rest
China M&A outcomes are determined less at signing than at integration. The transaction itself is comparatively standard; the friction is in confirming the financial picture, navigating the regulatory perimeter and absorbing a target whose records, workforce and systems were built on different assumptions. We work alongside the deal team from the first red-flag review through to post-closing integration.
Our services
Tax due diligence
We conduct buy-side and sell-side tax due diligence covering EIT, VAT, IIT, withholding tax, transfer pricing, environmental protection tax, deed tax and stamp duty positions for the trailing three to five years. Where the target operates across multiple provinces we coordinate with our local network to capture the differing interpretations of the in-charge bureaus. Our output is a red-flag report that quantifies the likely adjustments and the mechanisms (warranty, indemnity, escrow, price) for sharing them.
Deal structuring
We model the after-tax cost of asset vs. share acquisitions, of direct vs. indirect share transfers, and of transactions routed through offshore holdcos. We address withholding-tax exposure on the consideration, treaty relief availability, and the indirect tax (deed tax, stamp duty, VAT on the transfer of the underlying assets where relevant) and the LAT position where real property is involved.
Valuation support
We work with the appointed valuer on the tax-relevant inputs: the identification and valuation of intangibles (which feeds both the price allocation and the post-deal transfer-pricing position), the treatment of contingent liabilities, and the assessability of goodwill for tax amortisation in PRC GAAP.
Regulatory and approvals
For transactions in restricted sectors, involving state-owned targets or above the merger-control thresholds, we coordinate with PRC antitrust and FDI counsel on the SAMR and NDRC filings. We also handle the post-signing tax registrations, the SAFE capital-change reporting where the deal affects an FIE's registered capital, and the documentation for outbound deals that require NDRC and SAFE ODI registration.
Post-merger integration
The tax function rarely integrates itself. We help the buyer's tax team absorb the target by aligning the EIT and VAT registrations, harmonising transfer pricing policies across the combined group, rationalising IIT treatment for retained employees, and identifying quick-win tax positions that materially improve the post-deal P&L.