It's that time of the year to put together final corporate financials for 2007 and also to get ready for audits.

We own an advertising company in China and it is registered in Shanghai's Jiading county. Apart from just initiating a county-wide WiMAX program and being home to China's F-1 track, Jiading is one of the nicest places to register for an ad license in China's major cities. They have good tax benefits and easy administration. So while it's about 45 minutes from our Shanghai office on Nanjing Lu and takes our accountant even longer to get out there on snowy days (like today), Jiading's benefits far outweigh any negatives. We setup that company about 4 years ago.

We are about to re-capitalize that Shanghai advertising company so that with a larger amount of money invested we have the ability to get better bank benefits, have a wider array of services, and also have the ability to use more DM licenses. BUT… we should have done it this time last year, because it seems that benefits are drying up as we speak…

One of our other businesses is a WFOE also in China registered in Beijing's Zhongguancun with branch offices in Shanghai and Shenzhen and registered previous to the Shanghai advertising business. We obtained a special high-tech certification a few years ago that is renewed every two years because of the specialized software services we develop and this certificate previously gave us added tax benefits (being a foreign-owned tech company we, by default, also received great tax bonuses including a few years of zero taxes). But now with the Enterprise Income Tax law that went into effect on January 1, 2008, there are still some uncertainties on exactly how our high-tech certified business is going to be affected and to what extent we are liable for taxes. Our accountants in Beijing are still waiting on exact word on what's going on for WFOE's that have the special high-tech certified status. Anybody have a clue?