Tashkent, work hard! - PDAEXSEA partner Liang Hongxing established the first Chinese-funded finance and taxation office in Uzbekistan
Financial and tax services
2025-02-20 09:17:33
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In October 2024, PDAEXSEA partner and senior expert with more than 30 years of experience in international taxation, Liang Hongxing, opened a Chinese-funded taxation firm in Uzbekistan! This is the first local accounting and taxation firm led by a Chinese domestic taxation firm itself.
"I will definitely stick to it, because this is my last ideal and pursuit in life!" Mr. Liang confessed in his autobiography.
PDAEXSEA is well aware of the difficulty of building a team from scratch overseas, and pays tribute to all the warriors who have opened up new territories in foreign countries!
The spark of localized services will eventually illuminate the path of globalization for Chinese companies.
In the future, we look forward to more opportunities for cooperation with pioneers like Mr. Liang's team!
- Set up the first Chinese-funded tax office in Uzbekistan
Liang Hongxing
Uzbekistan is a landlocked country in Central Asia, bordering the Aral Sea in the northwest, Kazakhstan in the north, Kyrgyzstan in the east, Tajikistan in the south, and Turkmenistan in the southwest. The terrain of the whole country is high in the east and low in the west. It is one of the only two double landlocked countries in the world. Ukraine is very rich in resources, including oil, natural gas, gold, cotton and other important resources. Its infrastructure is still to be built and improved, and there is almost no mature manufacturing industry.
On November 16, 2023, Lebang Finance and Taxation Service Group was established in Beijing and held an unveiling ceremony. Because I had known Lebang Group's President Liang Xiaobin for a long time, I was fortunate to be invited to attend its opening ceremony, and thus met Zhang Junheng, the chairman of the finance and taxation group. At that time, Mr. Zhang only heard Mr. Liang Xiaobin introduce that "Mr. Liang is a well-known international tax expert in China." What I didn't expect was that several months later, Zhang Junheng suddenly asked me to have a good talk with me. So we got acquainted and started the following conversation that affected our fate; Mr. Zhang said to me: "Mr. Liang, you know that I integrated more than a dozen finance and taxation offices in Hebei and established Lebang Finance and Taxation Group in Beijing. Originally, I wanted to use Beijing's special status as the capital to expand it into a national 5A office, but after arriving in Beijing, I found that this track was much more difficult than I imagined. It was homogeneous and involuted, and it was difficult to get ahead." "You are an international tax expert. I want to change my track and work with you to do international tax. Can you give me some advice?"
I was very surprised by the sudden invitation and switch, but I still reminded him objectively: "International tax has a good direction, less competition, and a promising future, but the threshold is high, the difficulties are great, the initial investment is large and there are risks. You have to think about it." Mr. Zhang encouraged me and said: "With you, Mr. Liang, personally coming out to check, I have confidence."
To be honest, since I founded the "Tax Star" International Tax Studio in August 2018, I have always wanted to set up points overseas independently to break through and open up the "best kilometer" to serve Chinese "going out" enterprises. However, I have been suffering from practical difficulties such as funding and team, and it has not been realized. Although many managing partners of China's domestic 5A tax firms have been inviting me to join and develop international tax business, I still think that the conditions are not mature, so it has not been formed. I gave Mr. Zhang a brief introduction to the current fiscal and taxation situation and development opportunities of the countries along the Belt and Road, and then tried to say, "Central Asia currently has a rare development opportunity. If you really want to enter the "going out" international taxation track, let's first go to Tashkent, the capital of Uzbekistan!" Mr. Zhang immediately said, "Teacher Liang, I listen to you."
Mr. Zhang did what he said, and immediately agreed on the itinerary with me and booked a round-trip ticket from Beijing to Tashkent. On the evening of April 10, 2024, we flew directly to Tashkent and started a ten-day inspection trip to Uzbekistan. Once we arrived in Tashkent, we began to visit local customers and conduct business research, and of course, experience the local customs and practices. I clearly remember that there were many people and things we met at that time, which had a profound impact on Mr. Zhang and me and touched me a lot.
As soon as we arrived in Tashkent, we checked into a Michelin hotel recommended by a Chinese-funded enterprise. From our daily meals and accommodation, we learned about the legendary story of the hotel owner Lan and his wife. The hotel owner Lan is from Wenzhou, Zhejiang. He does not have a high level of education. He went to Russia in his early years, found a local Russian girlfriend, and began to learn spoken Russian. Later, for various reasons, the Russian girlfriend abandoned him, and he was very sad, so he went to Tashkent, Uzbekistan to hide. Then he met good luck. Chinese companies and Chinese people poured into Uzbekistan to do business. He began to try to rent a Michelin hotel from locals to provide food and accommodation services for Chinese people. Perhaps it is the natural business talent of Wenzhou people. Teacher Lan grasped the special and core of Chinese hotels. If you grasp the stomach of Chinese guests, you can keep their hearts! One of the characteristics of Michelin hotels is the rich and varied breakfast and economical Chinese lunch and dinner. Every breakfast, there is free porridge, soy milk, fried dough sticks, as well as warm steamed buns and fried rice. Of course, there are noodles that can be simply cooked by yourself, and various Chinese stir-fried dishes that are kept warm! No matter where you come from in China, you can always enjoy the taste of your hometown that suits your taste. If you don't want to spend time going out and looking for places to eat, the hotel's rice with different side dishes can help you solve lunch and dinner. In addition, the hotel is also equipped with a small Chinese supermarket, which is full of daily necessities with Chinese characteristics, which makes Chinese guests feel at home in a foreign country. Later, Boss Lan married a fellow Wenzhou native, the young and beautiful Ms. Zhuge. Ms. Zhuge is warm and sociable. The couple worked together and then they contracted the entire Michelin Hotel, and the business became more and more popular! When Chinese people go out, they are willing to gather together and trust the word-of-mouth recommendations of their friends. Michelin Hotel has also become the first choice for Chinese people to check in in Tashkent!
We also went to the China Building Materials City in Tashkent, and chatted with a Northeastern lady in a store and learned that her family originally contracted cotton production in Xinjiang, but because the United States and the West have been smearing and sanctioning Xinjiang cotton over the years, their business in Xinjiang has become difficult, so they quickly switched to Uzbekistan. Uzbekistan's cotton spinning is also good and the related costs are lower, especially Uzbekistan and the European Union have a reciprocal tariff and trade agreement (zero tariffs, preferential customs clearance), which allows their cotton products to be exported to Europe and the United States through Uzbekistan, avoiding the tariff barriers and suppression of "Made in China" by Europe and the United States. From then on, her family's cotton business in Uzbekistan has been getting better and better. In addition, they found that Uzbekistan's agricultural production mechanization is still very backward. For example, the "three-wheeled and three-wheeled electric vehicles" made in China are cheap, not restricted by road conditions in Uzbekistan, and do not need to be licensed, so her family also opened a store in the China Building Materials City and sold "three-wheeled and three-wheeled vehicles" at the same time, which was also very popular locally. There are also Mr. Qu and Mr. Xiao Liang from Tashkent. With the successful promotion of the short videos "Mr. Qu in Central Asia" and "Xiao Liang in Uzbekistan", they became Internet celebrities among local Chinese. They then opened a "China Xinsheng Real Estate" company, which specializes in finding houses for Chinese people. In the process of renting houses, they also made their first pot of gold in Tashkent. There are many similar stories of "getting rich by panning for gold" in Uzbekistan, which makes us feel that in Uzbekistan, especially in Tashkent, it is like in the early days of "reform and opening up" in my country in Shenzhen Special Economic Zone. As long as you seize the opportunity and do it boldly, you can get rich.
We also learned that there are 500-1000 Chinese stores in several Chinese malls in Tashkent alone, and there are many small and medium-sized Chinese-funded enterprises. These enterprises generally do not have their own internal finance departments or are equipped with special finance and taxation personnel. Their daily necessary agency accounting, tax declaration and other businesses are all entrusted to local small and medium-sized finance and taxation firms. The monthly agency bookkeeping and tax filing services of the local finance and taxation office are between US$500 and US$700, which is much higher than that in China. In addition, the communication between them and the local finance and taxation office is very difficult and helpless due to the language and business barriers. Even so, they are still subject to sudden inspections by the local tax authorities from time to time every year. Not only do they have to pay back taxes and fines, but they also have to spend an unfair amount of public management fees. In contrast, in the entire huge Tashkent, there is no relatively large and professional Chinese domestic finance and taxation office. There are only 7-8 Chinese domestic law firms, and these Chinese domestic law firms in Uzbekistan also do some finance and taxation business. Therefore, in Tashkent, professional Chinese finance and taxation offices are currently in a "blank window period". Therefore, Zhang Junheng made up his mind on the spot in Tashkent to set up a branch with me in Tashkent as soon as possible. Subsequently, in order to further clarify matters and initiate the legal procedures for company registration, Mr. Zhang and I went to Tashkent for the second time. We stayed in Tashkent for another 10 days from July 1 to 10, 204. The second time, we not only strengthened our determination to set up a base in Tashkent, but also had already started the relevant preparations for the establishment of the base.
(Liang Hongxing, Zhang Junheng, Ji Xu Xinjiang and their team took a photo in front of the Michelin Hotel during their inspection in Tashkent)
On April 16, 2024, during my first visit to Tashkent, I also took time to visit the long-awaited Samarkand. Samarkand was once an important town on the ancient Silk Road. It is a key hub for linking the exchange of Eurasian civilizations and economic and trade transactions. There are the Golden Horde, the historical legend of the Timurid Empire, and the story of One Thousand and One Nights. Coincidentally, I was born in Kashgar, southern Xinjiang, which was also an important town linking the Central Asian Silk Road! Due to historical links, the Uyghurs in Xinjiang and the Uzbeks in Ukraine are extremely similar in culture, Islam, and living habits. Uyghur and Uzbek are 90% interchangeable. Since I was born in Kashgar, I was entrusted and raised in a local Uyghur family when I was young. The Uyghur nanny mother had a great influence on my enlightenment education and life. Naturally, I can speak some daily Uyghur, especially the diet and daily life of the Uyghurs. When I walked into the Registan Square and visited the three magnificent madrasas, the magnificent mosques, giant arches, towering minarets, deep blue domes, and intricate wall patterns immediately shocked me, and made me recall and compare my hometown, Kashgar. Next to my hometown in Kashgar, there is also a famous historical landscape, Id Kah Square and mosque. The mosque is smaller than the madrasas in Samarkand, but the style and shape are very similar. In particular, the clothes, food and words of the local Uyghurs there are almost exactly the same as those of the locals in Samarkand! This also reminds me of the Tang monk's journey to the West to seek Buddhist scriptures, Zhang Qian's mission to the Western Regions, they all went to Samarkand, the sound of camel bells, the long ancient Silk Road, and the Sogdian (Hu) merchants who once traveled from Samarkand to Kashgar... Perhaps it was fate that after the opening of the China-Kyrgyzstan-Uzbekistan Railway, my hometown Kashgar can directly reach Andijan, Uzbekistan! I seem to have been reborn as a child and returned to my hometown! However, it is also a historical mission that requires me to promote and do a good job in the current economic and trade exchanges between China and Uzbekistan on the New Silk Road!
(Liang Hongxing took a photo in front of the three famous Madrasahs in Samarkand)
It is really the so-called "right time, right place, and right people". Soon from August 11 to 20, 2024, General Manager Zhang and I went to Tashkent for the third time. This time, in addition to General Manager Zhang and me, there was also a large team of Hubei Jiangzhidu Finance and Taxation Group led by Chairman Xu Xinsheng. This time we completed the company legal registration procedures for Tashkent Lebang Finance and Taxation Office, and also selected the company's local office and accommodation address. We started the arrangement of Chinese expatriates and the recruitment of local employees. More importantly, we three parties determined the model of tripartite partnership and cooperation and the strategy for business development; that is, Lebang Finance and Taxation Group and Jiangzhidu Finance and Taxation Group mainly invest in funds and personnel respectively, and are partners of Tashkent Finance and Taxation Office as shareholders of the company, while I, with my personal international tax expert brand-this special "intangible asset" value, personal experience and energy, as a partner in Tashkent with virtual proportional shares, that is, I do not need to invest any funds in Tashkent Finance and Taxation Office, but I do not receive any salary. This Lebang Group and Jiangzhidu Group have the most full trust in me and the greatest value affirmation. We established the first local accounting and tax firm in Tashkent led by a Chinese domestic tax firm. The partnership is not only a partnership of capital, but also a partnership of people. It is also the first case of a Chinese domestic tax firm complementing each other’s strengths and a personal brand “virtual investment” to “band together for warmth” overseas!
(Registration Certificate of Tashkent Lebang Tax and Accounting Firm)
On October 20, 2024, we held a grand opening ceremony in Tashkent as scheduled. Cui Haibo, President of the Uzbek Chinese Enterprises Chamber of Commerce (Chairman Unit of CNPC), delivered a speech. More than a dozen large state-owned enterprises and private enterprises, including China Energy Construction, China National Nuclear Corporation 22, China Construction, BYD, and ZTE, came to congratulate. At the same time, almost all Chinese lawyers and related logistics companies in Uzbekistan came to congratulate. We also did a live broadcast promotion on the spot, with as many as a thousand people participating online, achieving a good opening promotion effect. Of course, there are also members of our partner's main management team who came to Tashkent from Beijing, Shijiazhuang, and Wuhan, as well as Zhou Wencheng, Chairman of China Tax Science and Technology Finance and Taxation Group, and Zheng Yancheng, Chairman of China Tax Network Finance and Taxation Group, who came from Beijing. They congratulated us on the spot on behalf of the two 5A large firms in China, which gave us great encouragement! We are even more grateful to Geng Jinyue, former president of the Hebei Provincial Tax Association, who came to the meeting in person to congratulate us. I still remember his sincere advice to us: "Tashkent, work hard and make a name for yourself."
(Photo of the three parties of Tashkent Lebang Finance and Taxation Office: Zhang Junheng, Liang Hongxing and Xu Xinsheng at the opening ceremony in Tashkent)
After listening to Mr. Zhang's inner confession, I also made my inner confession: "Mr. Zhang, in fact, I set up a store with you in Tashkent under the huge pressure of my family and gambled my life! My wife and daughter did not support me to start a business abroad again. They begged me to cherish the rare reunion of my family, enjoy my old age, and not go abroad again. Especially in these years, I have worked hard and run around. My body is exhausted and sick all over. If I continue like this, I will either die suddenly on the plane on a business trip or on the way to visit customers..." I also choked a little, but still comforted Mr. Zhang and said, "But don't worry, I will definitely stick to it, because this is my last ideal and pursuit in life!"
Because this is an extremely heavy topic, neither of us wanted to say anything more afterwards. We just clinked glasses with each other and drank silently. I also knew when and how I returned to the room? Finally fell asleep.
In the first few months after opening, we visited potential central Chinese clients in Tashkent, such as PetroChina, China Energy Construction, Sany Heavy Industry, CNNC 22, CITIC Construction, Central South Design Institute, etc., communicated with their local Chinese finance and taxation managers, and established daily contacts. More gratifyingly, in the following months, many Chinese companies contacted us or visited our Tashkent office to discuss specific cooperation matters with us, and I began to have signed financial and taxation service business.
(Liang Hongxing, Zhang Junheng and Xu Xinsheng took a group photo with Xi Pengzong, the financial director of CNNC No. 22 Industrial and Commercial Uzbekistan Company)
(Liang Hongxing, Zhang Junheng, and Feng Jiangjiang, the person in charge of the Uzbekistan project of China Energy Construction Investment, and Xie Suzhou, the financial director)
I ignited the following sensitive topic: "Mr. Zhang, since we are determined to develop high-end value-added services for Tashkent central enterprises, we must recruit high-end international Chinese expatriate talents, otherwise we will not be able to convince those central enterprises and sign contracts?"
Mr. Zhang retorted: "Teacher Liang, don't we have you? You are our biggest signboard, isn't that enough?"
I also retorted "I can't be just a commander without troops! You also need capable people and a team. I can't do everything all the time, right?"
Mr. Zhang still insisted: "We must first sign a big order from a central enterprise. If we really can't help, it's still time to hire someone with a high salary."
I also insisted: "I have also been a tax supervisor for a central enterprise and worked at Deloitte. You underestimate the professional vision of the central enterprise's assessment and selection intermediaries. They not only want the star leader to check, but also the team that has specific work done underground! Deloitte hired experienced tax bureau officials at a high salary at the time, burning money for a few years, and then monopolized the Chinese foreign investment market."
Mr. Zhang was even more excited: "We are not one of the Big Four international firms, we are a local domestic firm, we can't have the strength to keep burning money! We must survive first before we can talk about recruiting and developing!"
Xu Xinsheng, chairman of Jiangzhidu, wanted to break the awkwardness of this discussion; "Teacher Liang, we understand your feelings and pertinent suggestions very well, and we do need to increase capital investment and personnel matching later."
Li Xiangzhen, general manager of Beijing Tianchuang Qiancheng Finance and Taxation, also comforted me and said, "Teacher Liang, don't be too anxious or too pessimistic; Chinese companies also understand the current reality of Tashkent intermediaries, and they don't necessarily have to benchmark The "Big Four" will also have a certain gradual understanding and tolerance of the internationalization of our Chinese domestic firms. Moreover, our Chinese personnel currently sent abroad also have a certain level of professional knowledge in finance and taxation and development potential. You should let go and teach them boldly to follow you. They will get started quickly. When we were in Deloitte, weren't we also brought up by foreign partners and senior managers? They all had a rapid growth process. "
I have listened to what Mr. Xu and Mr. Li said, and my anger has subsided a lot. After the meeting, Mr. Zhang also wanted to ease the relationship with me. He said he would treat me to a Chinese meal, but I still didn't want to pay attention to him. Because I know very well that the topic we are arguing about is essentially a paradox of "which came first, the egg or the chicken", the dialectical philosophical relationship between the contradiction and unity of survival and development. No one can convince anyone, and there is no final argument result that is biased towards the extreme side. But I still clearly feel the heavy pressure and comprehensive responsibility. In the past, I was just a so-called "star expert", and I didn't have to consider the funding and team issues. I just needed to cherish my feathers and not ruin my brand! However, now that I am a partner of Tashkent Finance and Taxation Office, I must understand and be cautious about the large amount of capital investment, especially the continuous burning of money without any development gains! Similarly, as a partner, I must not only lead the way in visiting potential customers, do a good job in market promotion and marketing, but also insist on professional control to ensure the delivery of high-quality consulting reports. More importantly, I have to personally train and train a young team that does not have much international experience but is smart, capable and has potential! I also asked myself; "If I continue to invest more energy and still cannot get any compensation, how long can I persist in my so-called ideals?"
With cooperation, there will inevitably be disputes and differences. As long as our partners respect each other, fully trust each other, and the starting point is to develop a common cause, it is normal to seek common ground while reserving differences and compromise with each other. Later, I quietly discovered that both Mr. Zhang's Lebang Group and Jiangzhidu Finance and Taxation Group attached more importance to the formation of the team of Chinese personnel sent abroad. Mr. Zhang soon recruited a mid-level finance and taxation talent who had work experience in Kazakhstan and accounting firm experience in Shenzhen. He will soon be in Tashkent. In addition, Jiangzhidu has also decided to add an experienced finance and taxation director to the Tashkent office. At the same time, Jiangzhidu and Lebang have also stepped up cooperation with local colleges and universities. After the start of school in 2025, they will introduce 3-6 more graduate students majoring in Russian or finance and taxation, and then come to our Tashkent for internships, and finally strive to keep 1-2 graduate students to work in Tashkent. I am also "living in pain and happiness", and I am willing to invest more time and energy for Tashkent and the Tashkent team!
What makes our three parties even more encouraged and confident is that the Hebei Provincial Tax Agents Association and the China Certified Public Accountants Association attach great importance to and strongly support our new model of setting up an office in Tashkent. The Hebei Provincial Tax Agents Association soon released the news of our opening ceremony in Tashkent. Subsequently, the International Development Committee of the China Tax Agents Association also hopes to summarize the Tashkent case as soon as possible. Our three-party joint article "Sharing the Practical Cases of Chinese Domestic Tax Firms "Going Global" - A Summary Report on the Establishment of a Finance and Taxation Office in Tashkent, the Capital of Uzbekistan" was soon published in the 11th issue of China's "Certified Public Accountants" magazine in 2024 after being reviewed and revised by Huang Hongbin, Director of the Standards Committee of the China Tax Agents Association, and then in 202 On the morning of December 11, 2014, the "International Development Research Seminar on Tax-related Professional Services" sponsored by the China Certified Tax Agents Association was held in the Shenzhen Qianhai International Tax Agent Building. As a member of the International Development Committee of the China Tax Agents Association, I was honored to be invited to attend the meeting. At the seminar, I gave a brief report on the experience of setting up a tax office in Tashkent, Uzbekistan in a tripartite partnership with Hebei Lebang Finance and Taxation Group and Hebei Jiangzhidu Finance and Taxation Group. Later, I learned that our practical case report materials in Tashkent have been submitted to the chairman of the China Tax Agents Association and have been highly praised and fully affirmed by the relevant leaders of the China Tax Agents Association. Our practical cases in Tashkent will also be reported by the China Tax Agents Association in domestic tax offices in China. We will promote it here.
The first two times Mr. Zhang and I went to Tashkent, we stayed at the Michelin Hotel in Tashkent. We went to and from Tashkent to pick up the airport, including when we went to Samarkand and then did business in Tashkent. We used the driver of the hotel. His name is Timur, just like the name of Timur the Great! He is so gentle, kind, capable and smart. He is hardworking and helpful. Mr. Zhang and I and other Chinese staying in the hotel like him very much. Every time we leave the hotel, we give him things that we can't bring back to China. He is very grateful and we have become good friends, even brothers. In contrast, in ancient China, ordinary people were the root. It is impossible to continue to use the emperor's name, it must be avoided, otherwise there will be a capital crime! Even now, under the influence of traditional consciousness, very few parents use the name of the deceased leader to name their children. But in Uzbekistan, ordinary people like the driver can be called Timur. This is the name of their heroic ancestors. They are the descendants of the once powerful empire! I can imagine that every time people call this name, they will arouse their sincere pride and historical inheritance! I like Timur, and I respect this country's great and ordinary nation! Tashkent is the right choice for our historical opportunity, and it is also the place where we will invest and pay in the future!