Case Studies

The Solution:

The local entity’s registration process, which was initiated and managed by PTL Group, was going according to plan, until the team discovered that in order to participate in certain tenders, a national business entity was required – and not a local entity. This meant that the word CHINA was to be added to the WFOE’s official, instead of the name of the city in which the entity was registered.

As it turned out, making this small change required us to re-submit all of the submitted documents, while also significantly increasing the registered capital. Despite these challenges – and the COVID-19 pandemic – PTL Group’s experience staff was able to obtain a national WFOE license.

We soon faced another challenge, when Afimilk requested to add assemblies in China to their national license. Yet since Afimilk’s registered address was located in the center of the city – where assemblies were prohibited – it was not possible to change the company’s license.

To solve this, we realized that it was imperative to change the company’s address to one of Beijing’s remote neighborhoods, and turn the city center office into a branch that belongs to an Afimilk company that is located in the suburbs. Once this was accomplished, we were able to achieve our goal.

The Results:

Establishing Afimilk’s WFOE took time, but since Afimilk’s ongoing operations were supported by PTL Group, there was no tight deadline. Every challenge encountered along the way was handled with utmost professionalism – and after taking every possible option into consideration.

Once the WFOE was established, all of Afimilk’s assets – from employees to funds to inventory – were transferred from PTL Group to the new WFOE in a swift and effective manner.

For over 16 years, Afimilk has relied on PTL Group’s support services without the need to set up a business entity in China. Yet when the company needed to take the next step forward, PTL Group was there to provide expert guidance. After the WFOE was up and running, PTL Group continued to manage the new entity’s operations, while providing a slew of services that ensure that the company continues to operate with utmost professionalism.

The Solution:

Prior to market entry, PTL Group’s team advised GeoEdge on China’s internet and privacy regulations, thus ensuring that they are compatible with China’s unique requirements. This also saved the company the burden of obtaining an ICP and registering a local entity in China.

As it turned out, reaching and cooperating with new and potential clients was relatively simple, as their profile was similar to GeoEdge’s existing clients outside of China.

Employment of new staff was outsourced to PTL Group, and a foreign manager was relocated to Beijing to manage the Asia-Pacific office. PTL Group supported the work permit application and has since been handling the annual renewal process.

Working with PTL Group saved the company the need to establish an entity. As a result, it did not have to meet China Cyber law regulations, which include exposing IP, sharing client information and reporting to the tax office. The company was able to operate legally in China while leaving its assets, IP, client base, servers and income flow out of China.

The Results:

After one year of operation in China, GeoEdge’s Chinese market value has tripled.

Working together with PTL Group has proved yet again that privately-owned startups can handle their China-out operation independently, without the need for partnering with major local investors or strategic JVs. Outsourcing business functions to an experienced and professional service provider is ideal for realizing market potential.

The Solution:

The company reached out to PTL Group to conduct a headhunting project. Before we began recruiting, our team conducted research on the company, industry, and relevant products. We also studied the relevant competitors in the local market and searched for employees in similar roles for reference. The search was conducted through several channels, including direct cold calling. After a screening process, we created a list of relevant candidates. After review, the company selected the candidates they wished to interview. We also conducted background checks for the most relevant candidates.

During the process, our headhunting team stayed in touch with the candidates to keep the leads relevant, while also negotiating the hiring conditions and managing salary expectations. Throughout the entire process, the client received a weekly progress report detailing the lead status.

The Results:

Over a period of 7 weeks, we analyzed 90 applicants, selecting 42 potential candidates and presenting 6 final candidates to the company after screening and interviewing them. After several rounds of interviews, the company selected one of the candidates.

Yet our work was not finished. After the chosen candidate began exhibiting doubts about working for a small startup, our team stepped in to offer relevant guidance and advice, until he finally accepted the offer and signed.

The Competitive Advantage:

After the candidate signs the employment agreement, PTL Group’s role is not over like other recruiting companies. We also provide Employment and HR services. Our HR team is responsible for establishing an HR relationship with the chosen candidate and managing all of his/her HR and employment needs. By doing so, we are also able to monitor our headhunting efforts.

Needless to say, this adds an even greater incentive for us to recruit not only the most suitable candidate for the job, but also to search for a candidate with a positive personality who can contribute to a pleasant office atmosphere.

By fulfilling a combined role of recruiter and employment and HR service provider, PTL Group ensures that the candidates are suitable for long-term position fulfillment. We are proud to report that several candidates we recruited are still working for our clients after 10, 12, and even 14 years.

This is clearly a significant competitive advantage, and it makes us very proud.

The Solution:

Importation:

PTL Group’s experienced logistics team guides the company throughout the entire importation process. This includes preparing all the required documents and certifications for the importation and selling of its electronic products in China. This also includes monitoring the process of releasing the products at China customs, to ensure a smooth and quick release. After the goods are imported, they are sent either to a PTL Group warehouse or to the local manufacturer for assembly.

The assembly process:

The PTL Group team coordinates the delivery of the company’s core product to the local manufacturer, who then proceeds to assemble it in the electric box. We sign a service contract with the local manufacturer, thus ensuring the terms and conditions of the service and payment. During this time, PTL Group is still the owner of the products and assumes full responsibility for them. Once the assembly is completed and the products are ready for shipping, our logistics team coordinates the shipping of the products either back to the PTL Group warehouse or to the buyers.

The selling process:

In order to sell the company’s products, the PTL Group finance team signs sales agreements with its distributors or end users. Once the products are ready, and the payment terms are fulfilled, we will assume responsibility for delivering the finished products to the customer.

Meanwhile, our finance team follows up and monitors the payment terms throughout the process from the moment the Purchase Order is submitted. Once payment is collected, our team handles all financial issues related to the payment including issuing VAT invoices (Fapaio), payment of VAT, VAT refunds, payment of local taxes, import tariffs, etc. At the end of the process, the PTL Group team handles the complex process of transferring the funds out of China.

The Results:

By outsourcing the entire supply chain activity and financial management of their projects to PTL Group, the company is able to operate in the Chinese market at full capacity – just as if they had their own company in China. Our team fulfills all of its operational needs, allowing its professional staff to focus on selling their products. Meanwhile, our team effectively monitors and handles the entire logistics and financial operation to ensure smooth client delivery, secure payments, and transfer funds to the company’s headquarters overseas. The entire operation becomes highly cost, time, and risk-efficient.

By partnering with PTL Group, the company is able to conduct the assembly activity in China and keep its IP safe and secure, by allowing the local manufacturer to perform only the necessary electrical work associated with building the electric box. The fact that we are the Import of Record and the owner of the products throughout the entire process ensures that the manufacturer has no direct contact with the company’s customers.

The Solution:

PTL Group was able to provide all the solutions that Blox needed: Employment of Blox employees in China, payment of salaries and social benefits, management of the company’s expense account, and high-level HR management – while ensuring that employee welfare complied with all necessary requirements.

PTL Group was able to share its insights and in-depth knowledge with Blox regarding optimal employee team management in China. PTL Group’s management team was always available for consultation based on Blox’s dynamic needs. 

The Results:

Blox was one of the first companies of its kind to operate in the Chinese market. The company’s pioneering activities had an enormous influence on market demand and on the company’s reputation as a leading international brand.

Blox was able to set up an operational team in China with utmost quickness and with minimal costs, while maintaining full control and transperancy over the activity of its team in China and without the need for setting up a legal entity in China.

The experience and knowledge accumulated by PTL Group throughout its work with diverse clients was crucial to its success in China.

While Blox is a western undertaking, the company entered China with a wealth of vital knowledge and a true market commitment, which are exemplified in its large China-based team and long-term vision. This complements the rise of the blockchain field in China, which has been identified by the Chinese government as having strategic importance.

The Findings:

The investigation was conducted by PTL Group’s audit team, which consists of specialists from admin, HR, logistics, trading and finance. The following critical facts and risks were uncovered:

• Cash flow problems: The cash reserve did not match the increase in sales. The lack of cash flow and existing large loans damaged the company’s profits and were extremely risky. A great deal of capital was tied up in accounts receivable and stocks. This put high pressure on the company to ensure sufficient cash flow availability for running daily operations.
• Legal risks pertaining to contract management: Many flaws were uncovered in the plant lease as well as in various logistics, sales, insurance and labor contracts.
• Other internal control risks: The company had no documentation of internal workflows. The financial supervision function was lacking. There was no practical methodology for metal sourcing, management & disposal, as well as recycling – all of which needed to be improved.

The Results:

The company understood that the issues uncovered in the operational audit can potentially jeopardize the company’s sustainable development. Company management agreed to the audit team’s suggestions regarding organizational restructuring, process definition and documentation, the establishment of a financial approval system, supervision and quality management improvement and the establishment of diverse internal control mechanisms.

The Solution:

With PTL Group’s support, the following changes were implemented:

• Establishment of assembly operations in China within 3 months
• A gradual shift of sourcing to local suppliers and product localization
• Initiation of direct sales in China

In addition, PTL Group took responsibility for bonded and front warehousing, financial planning, site operations management, establishment of legal entities, invoicing & collection facilitation, insurance and ERP.

The Results:

A significant cost reduction in bill of materials and lead-time, as well as a reduction in global cost, helped significantly improve penetration rate in China. These results were accomplished with one foreign engineer, one local engineer, two temporary assembly workers and one sales manager. The PTL Group team managed all support operations for Pep Filters.

The Solution:

In 2007 John Bryce Training entered the market using PTL Group’s infrastructure. PTL Group recruited the GM, the sales team and the initial trainers, while also providing a shared office space in Shanghai and Beijing, as well as classrooms for the training sessions.

As a result, John Bryce Training’s GM and sales team were able to focus more on business development, while the PTL Group team provided facility management and handled HR and financial aspects. When the sales team sold a course to a local customer, PTL Group would sign a service agreement with the customer, collect payment for the course and issue a formal VAT invoice.

Later, PTL Group’s marketing team provided marketing support for a period of two years, thus laying the foundations for the company’s marketing database and branding.

The Results:

John Bryce Training focused on the key functions of its business, while PTL Group provided the infrastructure and facilitated the hard-to-get education license and invoicing capabilities. This collaboration also allowed John Bryce Training to reduce numerous HR and commercial risks.

The Solution:

PTL Group was able to use its experience and relationships to import the company’s goods (despite strict restrictions for this line of products), store the goods in its warehouse in Shanghai, sign sales contracts with local clients, collect client payments, issue local VAT invoices and transfer the money back to the company’s HQ.

Even later, after establishing its own WFOE, the company elected to continue using PTL Group’s warehousing and distribution services (in both bonded and non-bonded warehouses) to manage their stock, while using its WFOE as the importer and seller of goods.

 The Results:

Using PTL Group services, the company’s team in China was able to increase their sales due to a competitive advantage gained by the shorter lead time and the ability to sell products in local currency. The company benefited from full transparency pertaining to supply chain control – from home country to end user.

The company’s business results allowed it to grow large enough to justify the establishment of a WFOE. At the same time, the company elected to rely on PTL Group’s provided services so that they could continue to efficiently manage their remote team in China while focusing on their core business.

The Solution:

In 2016 the company made its first steps in the Chinese market, with the help of PTL Group and its diverse services.

In order to enable the company’s operation in China, PTL Group recruited local professionals. These included developers, a sales team and account managers. They were able to assist both Chinese advertisers and app developers looking for opportunities in the global market and to bridge between them and their foreign counterparts. In addition, PTL Group also provided the staff with a shared office space. Marketing support was also provided, as PTL Group managed the company’s official WeChat account.

Using PTL Group’s expertise allowed the company to enjoy the benefits that are normally reserved for well-established companies, as opposed to younger business entities.

The Results:

Minimal resources were invested, but much was generated in return:

• Today, the company employs 9 staff members in Beijing.
• The company serves more than 200 clients in the Asia Pacific region. Approximately 80% of them are in China.
• Since its foundation, the company’s China-based revenues comprise 10-30% of the company’s total revenues.
• During 2019, the monthly profit has grown by 2.3%.

The Solution:

In 2017, the company contacted PTL Group after realizing that a change is needed in order to increase sales. As a result, the company started to employ local salespersons by relying on PTL Group’s HR & employment infrastructure.

Some of the required staff had already worked in the mobile advertising industry. They were familiar with this specific professional field and therefore could start generating sales immediately.

The PTL platform provides the company with an option to quickly fold up their business in China within 1-2 months, if and when they see fit to do so. If they had their own company in China, this may take 1-2 years.

The Results:

The company currently employs 5 salespeople in China, who are an integral part of the company and have also visited its central HQ several times.

According to the company’s finance manager, entering the Chinese market with PTL Group as a service provider is ideal, especially for startups. The rationale is simple: when a local employee is outsourced, risk exposure is minimal. For a startup company that wishes to shorten its time-to-market, but also withdraw quickly (if necessary), this is a very good deal.

The Solution:

As a partner in the Changzhou Industrial Incubation Initiative (CI3), PTL Group offered the company a space of 1,000 sqm in the incubator building (13,000 sqm). PTL Group also managed the entire assembly plant establishment process.

The Results:

After the space was ready, the PTL/CI3 team assisted the company in recruiting major production line positions, the GM and QC managers, as well as in managing the entire production license and GE vendor certification obtainment process.

PTL Group also helped the company with local purchases, machinery installations and the importing of components, tools and machinery. This while managing all HR, financial and logistics issues, as well.

The Solution:

PTL Group dedicated a space for the company’s factory within its incubation facilities (1000 sqm). PTL Group managed the entire process of set up, import of machinery, installations and the company’s WFOE registration so they could apply for all the required licenses.

The Results:

PTL Group was able to assist the company in establishing its own local manufacturing entity while obtaining an CFDA license and all other necessary licenses required for product manufacturing and sales.

The factory quickly moved into full production and is now selling locally made products, having overcome regulatory obstacles and evenly coping with the local competition.

The Solution:

PTL Group commissioned a financial expert to conduct a complete financial audit in order to map the company’s complete financial and tax situation, and to review alternative options.

The Results:

The audit results clearly showed that there was no financial justification to keep the company in its location. The results showed that the company would be better off shutting down operations in that location and seeking a better place.

PTL Group’s financial experts took over AVT’s financial process management for the following months, in order to perform company liquidation in the most efficient, legit and reasonable way possible.

PTL Group was able to clear all accounts payable and accounts receivable issues, close bank loans, submit employee termination plans, clear all tax issues, and facilitate the release of AVT from its liabilities in China without any complications.

The Solution:

One of PTL Group’s skilled managers fulfilled company’s purchasing management tasks. The work required in-depth knowledge of the chemical industry, which the PTL Group Manager acquired with the support of PTL Group’s logistics and administrative teams.

The Results:

PTL Group’s dedicated manager became an expert in purchasing the ingredients required and continued to do so for the next few years. The manager quickly became completely occupied with the company’s purchasing needs, and as a result PTL Group, the manager and the company all decided that it would make sense for the manager to become an employee of the company.

The Solution:

PTL Group’s professional team took over the company’s bookkeeping, HR and accounting.

• All books had to be redone two years back.
• All HR documents had to be reviewed and improved.
• WH records were checked and supervised on a monthly basis.

The Results:

VAT refund was successfully received (1/2 million RMB).