Talk about the risks of "going out" of Chinese insulation board companies
With the steady progress of China's advocacy of the "Belt and Road" strategic plan, at the same time, in order to resolve the contradiction of domestic overcapacity and for the development of the enterprise itself, Chinese insulation board companies have gone abroad and have chosen new opportunities for insulation production lines in insulation material manufacturers around the world. However, the pace of "going out" of some enterprises is not stable due to various factors, and even has certain investment risks.
Some market participants have recently conducted in-depth and extensive communication and exchanges with the partners and government departments of Central Asia, Africa, Southeast Asia and other countries on the construction of new projects due to the expansion and construction of international thermal insulation business. The following risks may be encountered during the process of “going out”:
1. The political stability of the investment destination country. Many countries have several parties, various religious organizations, anti-government armed forces, and contradictions of various domestic forces. The government's control of various forces is unsatisfactory, resulting in poor domestic political stability. There have been precedents for thermal insulation board companies that have gone abroad and were forced to suspend work or even withdraw due to domestic power struggles in Southeast Asia and Central Asia. Therefore, for insulation board companies planning to invest abroad, they must pay attention to, study, and analyze the political risks of the investing country.
2. The integrity of the government in the destination country. Whether it is Central Asia, Southeast Asia, or Africa, the government corruption in many countries is relatively serious. Visiting government officials and carrying out various approval procedures for the project must give gifts. Otherwise, it may bring unexpected confusion to the progress of the project. Will greatly increase the investment cost of the project. Therefore, when Chinese insulation board companies choose projects abroad, they must be aware of the integrity of the governments of the investing countries.
3. Labor quotas. In order to protect the employment opportunities of the local people, many countries in Central Asia and Africa have strict quota management for foreign workers. In order to ensure the construction quality and construction progress of the project, the insulation board construction project of the “going out” insulation board enterprises All are contracted by well-known enterprises in China, so a large number of Chinese laborers will enter the investment country during the project construction period, reminding “going out” enterprises to apply for labor quotas in advance according to the project construction progress, otherwise, it may be due to domestic The personnel cannot go abroad on time and delay the construction period, thereby increasing the investment cost of the project. Within one or two years after the completion of the project, local talents should be cultivated as soon as possible. In the future, the Chinese personnel should not exceed 15% of the total number of employees.
4. Tax risk. Tax management in many developing countries is chaotic, many trade activities (including service trade) have no invoices, and many insulation board companies that "go out" are often listed companies and joint-stock companies. Financial management must be transparent, fair and rigorous. Therefore, For the above trade behavior, it is best to purchase services through a qualified accounting firm or tax service agency in the host country to ensure investment compliance and avoid tax customs.
5. Selection of cooperation partners. In order to establish contact with the government department of the host country as soon as possible and obtain the support of the host country's government, in order to obtain investment preferences in the host country, some of the "going out" insulation board companies will refer and match the host country through intermediaries or intermediaries. Partners, but some intermediaries or intermediaries in order to obtain expensive intermediary fees, the economic strength of the partners they recommend and the relationship with government departments may not be as the intermediary said, if the partner is not properly selected, not only It is not possible to obtain preferential treatment from the host government, and it is likely that the project approval time will be greatly extended, and even the project approval may not be obtained, resulting in investment risks. Therefore, the “going out” insulation board companies must “keep their eyes open”, and do more research on the partners, and not be too hasty.
6. Mutual cooperation among domestic insulation companies. With the increasing intensity and speed of Chinese thermal insulation board companies' "going out", some projects in target countries will have several Chinese thermal i