Research On The Role Of Offshore Structure In Cross-border Investment

Along with the tremendous achievements China has made in the past 40 years of reform and opening up,the domestic social and economic demand for capital has changed from the "introduction" of the past to the "going out" of the present,from the initial attraction of foreign investment to the current stock of foreign direct investment.It ranks second in the world.At the same time,thanks to the rapid development of the national economy and the continuous adjustment of the direction of strategic development,a large number of powerful multinational companies have sprung up.The concept of cross-border investment has become more and more popular.However,in practice,we find that cross-border investment entities often do not directly invest in overseas companies,but indirectly invest through the establishment of one or more SPV companies overseas.In addition,these SPV companies are often located on small islands in the British Virgin Islands,the Cayman Islands and other territories.Then,why do investors have to work hard to register companies in these places,and why do they use these companies as the mainstay of project investment instead of directly investing their money abroad?This is what this article will study.As the largest overseas M&A transaction in China to date,the case of China National Chemical Corporation's acquisition of Swiss Syngenta for US$43 billion is very representative.In order to achieve this transaction,China National Chemical Corporation set up six SPV companies overseas and directly injected the funds raised into these SPV companies through overseas financing.This paper attempts to analyze the characteristics of these SPV companies and study the purpose of setting up these SPV companies in this acquisition through case analysis,and then summarizing the role of offshore structures in cross-border investment,and finally draws overseas The general approach to offshore architecture.In the case analysis section,the case of China Chemical Industry will be the main analysis object,focusing on the role of offshore structure in cross-border investment from the aspects of tax planning and M&A financing.At the same time,according to the actual situation of other enterprises,try Study the role of offshore architecture beyond these two aspects.Through the case study,this paper draws the following conclusions:Overseas investment through the offshore structure can make full use of the tax incentives of SPV companies and tax treaties between regions to minimize the tax dividends generated by the exit and future project exits.At the same time,through overseas financing,we can make full use of the advantages of international mature capital markets,broaden financing channels,and reduce capital costs.In addition,overseas investment through the establishment of offshore structures also serves to isolate legal risks,establish overseas funding pools,and upgrade domestic territory.The role of investor image.This paper also hopes to provide theoretical and practical guidance for the cross-border investment of Chinese enterprises in the construction of offshore structures through the case study of Syngenta's acquisition of Syngenta.